SK On has secured a long-term supplier in the U.S. energy storage system market. SK On said on Aug. 31 it signed a battery cell supply contract with U.S. ESS company Neovolta Power on Aug. 27 at Gwanhun Campus in Jongno district, Seoul.

Under the deal, SK On will supply Neovolta Power with a total of 9 gigawatt hours of lithium iron phosphate, or LFP, pouch battery cells over 5 years from 2027 to 2031. The batteries will be produced at SK On's plant in Georgia in the United States. SK On was selected as the key cell supplier for LFP pouch battery-based ESS products Neovolta Power will introduce. Neovolta Power is an ESS manufacturer with a production facility in Pendergrass, Georgia, and is a subsidiary of U.S. energy technology company Neovolta.

SK On is expanding its product lineup from a portfolio centered on high-nickel batteries for electric vehicles to LFP batteries for ESS. It is also seeking new customers based on its local production capacity in the United States. With this order securing stable volumes for 5 years, it will be able to raise utilisation at its U.S. plant and expects improved performance from a broader customer base.

The two companies are also pursuing ways to expand the scope of cooperation based on the contract. SK On plans to provide an additional 9 GWh of LFP battery cells for ESS on a supplied-materials basis through a separate contract within this year, with Neovolta Power purchasing them as pack products in which it has expertise. This is expected to increase the scale of cooperation to a total of 18 GWh.

SK On is accelerating business expansion in the domestic and overseas ESS markets. In February, it secured 284 megawatts out of a total 565 megawatts in bidding for South Korea's second ESS central contract market. In the United States, it signed a 1 GWh ESS supply contract in September last year with renewable energy developer Flatiron. SK On has local production capacity of about 100 GWh by combining its standalone plant SK Battery America, SK On Tennessee, and the joint venture plant HSBMA with Hyundai Motor Group.

Choi Dae-jin (최대진), head of SK On's ESS business division, said, "This contract will serve as an opportunity to further strengthen SK On's position in the U.S. ESS market." He added, "Based on local production capabilities and battery solutions tailored to customer demand, we will continue to expand new customers and business opportunities."

Steve Bond, president of Neovolta Power, said, "SK On's battery technology and production capabilities in the United States, and Neovolta Power's ESS manufacturing capabilities, are the foundation of this strategic cooperation." He added, "We will be able to respond effectively to growing demand in the United States and accelerate the expansion of both companies' ESS businesses."