South Korea's SK On signs energy storage battery deal with US firm NeoVolta Power

SEOUL, Aug 31 : South Korean battery maker SK On said on Monday it has signed a deal to supply U.S. firm NeoVolta Power with 9 gigawatt-hours (GWh) of lithium iron phosphate (LFP) battery cells for energy storage system use over five years from 2027.

The pouch-type cells will be produced at SK On's factory in the U.S. state of Georgia, it said in a statement.

SK On did not disclose the value of the deal, but industry estimates put it at around 1.5 trillion won ($1.09 billion).

The agreement comes as SK On expands into the energy storage system business to offset weaker demand for electric vehicles. Last year, the company signed a deal with U.S.-based Flatiron Energy Development to supply LFP batteries for energy storage systems.

SK On said it also plans to expand its partnership with NeoVolta Power through a separate agreement later this year, under which it would provide an additional 9 GWh of LFP battery cells. NeoVolta would assemble them into battery packs using its packaging expertise.

The planned partnership would bring the total volume of cooperation between the two companies to 18 GWh.

SK On had set a target of securing more than 20 GWh of global energy storage system orders this year and has said it was in talks with several U.S. customers over additional supply contracts totaling more than 10 GWh.

Other South Korean battery makers, including LG Energy Solution and Samsung SDI, have also been repurposing EV battery production lines to make batteries for energy storage systems as U.S. subsidies for EVs are phased out.

Energy storage batteries use similar chemistry to automotive batteries and store electricity for facilities such as data centres, helping balance power demand and supply.