DistantNews
Support us
🇰🇷 South Korea /Energy & Infrastructure

SK On wins U.S. energy storage battery deal as Korean makers intensify North American push

From Hankyoreh · () Korean

Translated from Korean and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources New plan
  • SK On signed a five-year contract to supply 9 GWh of lithium iron phosphate battery cells made in Georgia to NeoVolta Power from 2027 through 2031.
  • The deal brings all three major South Korean battery makers into an increasingly competitive U.S. energy storage market, where demand is growing alongside data centers, renewable power and grid expansion.
  • Analysts caution that Chinese firms still dominate global energy storage shipments and that U.S. automakers are building their own battery capacity, limiting the prospects for a lasting Korean advantage.

SK On has secured a 9-gigawatt-hour U.S. energy storage contract, giving South Korea’s battery industry another foothold in a market expanding beyond electric vehicles. The company said on Aug. 31 that it signed a long-term supply agreement with NeoVolta Power for lithium iron phosphate pouch cells produced at its Georgia plant.

The five-year contract runs from 2027 to 2031. Its volume is close to half of SK On’s stated global energy storage order target of more than 20 GWh for this year. The contract value was not disclosed, although industry estimates place it at about 1.5 trillion won.

In terms of price competitiveness, Chinese companies have the advantage, but Chinese battery makers such as CATL and BYD have difficulty establishing production bases in the United States.

— Hwang Kyung-inThe Korea Institute for Industrial Economics and Trade researcher described why local Korean production could help in the U.S. market.

SK On joins LG Energy Solution and Samsung SDI, which have already won large U.S. storage orders and started local production. LG Energy Solution recently signed contracts with DTE Energy for 6 GWh and Hanwha Qcells’ U.S. unit for 5 GWh, and operates five sites in the United States and Canada. Samsung SDI has won U.S. contracts valued at more than 2 trillion won and 1.5 trillion won, and is producing nickel-cobalt-aluminum batteries for energy storage in Indiana.

Energy storage orders are closer to a welcome rain during a drought.

— Park Chul-wanThe professor said storage contracts may provide limited relief from weak electric vehicle battery demand.

Demand is rising as artificial intelligence data centers consume more power, renewable energy expands and grids require more equipment to store and regulate electricity. The U.S. Energy Information Administration said the output capacity of grid-scale battery storage facilities of at least 1 megawatt grew from 43.6 GW at the end of last year to about 52 GW in June, a 19% increase in six months.

U.S. restrictions on Chinese supply chains may give Korean producers an opening. The Korea Institute for Industrial Economics and Trade said Korean companies with large U.S. production bases could benefit from tariffs and advanced manufacturing tax credits. Still, Professor Park Chul-wan called the recent storage orders “a welcome rain during a drought,” saying they could partly offset weak electric vehicle demand but would not replace it. Chinese companies hold more than 70% of global energy storage battery shipments, while U.S. companies including Tesla and Ford are expanding their own production.

Korean companies may have an opportunity in the U.S. market by lowering costs through local production and tax credits.

— Hwang Kyung-inHe outlined the potential advantage created by U.S. policy and Korean manufacturing bases.
About this summary

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

More Stories

From Our Blog