Deal extends SK On’s diversification from EV batteries to U.S. grid storage

South Korean battery manufacturer SK On said Monday it had signed a multi-year contract to supply 9 gigawatt-hours of lithium iron phosphate pouch-type battery cells to U.S. energy storage company NeoVolta Power through 2031, a deal the company described as a step into the U.S. stationary-storage market. Cells will be produced at SK On’s plant in Georgia, the Seoul-based company said.

SK On, a unit of SK Innovation, has anchored its existing U.S. operations around the nickel-rich chemistries used in electric vehicles. In announcing the NeoVolta deal, the company said it had been “diversifying its portfolio beyond high-nickel batteries primarily used in electric vehicles by expanding into LFP batteries for battery energy storage systems, or BESS.”

The 9 gigawatt-hours covered by the contract are, according to SK On, “roughly enough to supply electricity to nearly 1 million households for a day.” Cells will be delivered under the agreement over five years through 2031.

SK On’s ESS business chief, Choi Dae-jin, called the agreement a move that “strengthens SK On’s position in the U.S. BESS market and brings together SK On’s U.S.-made LFP battery technology with NeoVolta Power’s growing energy-storage manufacturing capabilities.” He added: “We view NeoVolta Power as a strategic partner as we expand our presence in the U.S. energy-storage market. By combining our respective capabilities, we will pursue new commercial opportunities and deliver competitive BESS solutions that meet evolving market needs.”

NeoVolta Power President Steve Bond said he expected the partnership to accelerate growth for the two companies in the U.S. BESS market and to help address rising demand in the United States. “SK On’s battery cell technology and U.S. manufacturing capabilities, combined with NeoVolta Power’s energy storage expertise and manufacturing capabilities, provide a strong foundation for this strategic partnership,” Bond said.

The deal was reported to be worth approximately $1 billion, but SK On declined to confirm the figure. On the Seoul stock exchange on Monday, shares of SK Innovation jumped 7.36%, while the benchmark KOSPI edged up 0.46%. SK On itself is not publicly listed.