Partnership could expand to 18 GWh as SK On seeks to boost utilization of its U.S. manufacturing base and diversify beyond EV batteries
SK On is accelerating its expansion into the U.S. energy storage system market, leveraging its large-scale local manufacturing footprint to diversify beyond electric vehicle batteries and establish LFP batteries as a new growth pillar.
The South Korean battery maker said on Aug. 31 that it has signed a five-year agreement to supply 9 gigawatt-hours (GWh) of lithium iron phosphate (LFP) battery cells to U.S. ESS company NeoVolta Power.
Under the agreement, SK On will supply LFP pouch cells from 2027 through 2031, with the batteries to be manufactured at its plant in Georgia.
The deal gives SK On a long-term customer for locally produced ESS batteries while providing an opportunity to improve utilization of its U.S. manufacturing capacity. It also marks another step in the company’s effort to diversify a portfolio that has historically centered on high-nickel batteries for electric vehicles.
The agreement was signed on Aug. 27 at SK On’s Gwanhun Campus in Seoul by Dae-jin Choi, head of SK On’s ESS Business Office, and Steve Bond, president of NeoVolta Power.
From EV batteries to a broader ESS portfolio
SK On has built a substantial manufacturing presence in the United States as demand for electric vehicles expanded. The company is now looking to use that production infrastructure across a wider range of energy applications.
ESS represents one of the most significant opportunities.
As renewable energy capacity and electricity demand increase, large-scale storage systems are becoming increasingly important for balancing power grids and storing electricity for use when needed.
LFP chemistry has emerged as a major option for ESS applications because of its cost competitiveness, cycle life and safety characteristics.
For SK On, expanding into LFP-based ESS products could therefore serve two purposes: securing new customers in a growing market and improving the flexibility of its existing U.S. production network.
SK On currently has about 100 GWh of annual production capacity in the United States through SK Battery America, SK On Tennessee and HSBMA, its joint venture plant with Hyundai Motor Group.
The NeoVolta Power contract provides five years of committed volume, which SK On expects will contribute to higher plant utilization and improved business performance.
Partnership could double to 18 GWh
The relationship between the two companies could extend well beyond the initial 9 GWh supply agreement.
SK On plans to pursue a separate agreement later this year under which it would provide an additional 9 GWh of LFP cells to NeoVolta Power.
Under the proposed structure, the cells would be supplied to NeoVolta Power for integration into battery packs, which SK On would then purchase as finished pack products.
If completed, the two companies’ overall cooperation would reach 18 GWh.
The model could allow SK On to combine its battery cell technology and U.S. manufacturing capabilities with NeoVolta Power’s expertise in ESS manufacturing, expanding the partnership beyond a conventional supplier-customer relationship.
NeoVolta Power operates an ESS manufacturing facility in Pendergrass, Georgia, and is a subsidiary of U.S. energy technology company NeoVolta.
“This agreement will serve as an opportunity to further strengthen SK On’s position in the U.S. ESS market,” Choi said. “We will continue to expand new customers and business opportunities based on our local manufacturing capabilities and battery solutions tailored to customer needs.”
Bond said the strategic cooperation combines SK On’s battery technology and U.S. manufacturing capabilities with NeoVolta Power’s ESS manufacturing expertise, allowing the companies to respond more effectively to growing U.S. demand.
GRIDON strategy gains momentum in North America
The latest contract is part of a broader push by SK On to establish ESS as a meaningful business alongside EV batteries.
In South Korea, the company secured 284 megawatts (MW), or 50.3%, of the total 565 MW awarded in the country’s second centralized ESS contract market tender announced in February.
SK On has also been steadily building its U.S. customer base. In September last year, the company signed a 1 GWh ESS supply agreement with renewable energy developer Flatiron.
In June, SK On held an event for ESS industry customers in Texas and introduced its ESS product brand, “GRIDON.” The name combines “Grid” and “On,” reflecting the company’s ambition to support energy transition through grid stabilization.
The NeoVolta Power deal significantly increases the scale of that effort, moving SK On from individual ESS projects toward a multi-year supply structure.
More importantly, the contract illustrates how SK On is beginning to connect three pieces of its North American strategy: a large U.S. manufacturing footprint, an expanding LFP product portfolio and growing demand for stationary energy storage.
With additional cooperation potentially taking the partnership to 18 GWh, SK On’s U.S. business is increasingly evolving from an EV battery-focused operation into a broader “EV plus ESS” platform — a shift that could improve both customer diversification and the utilization of its North American manufacturing assets.
