SK on is set to vigorously expand into the booming North American energy storage system (ESS) market by advancing its lithium iron phosphate (LFP) battery business. The company announced on July 11 that it had signed a memorandum of understanding (MOU) with L&F to supply cathode materials for LFP batteries in North America.
The agreement was signed at SK on Green Campus in Jongno-gu, Seoul, in the presence of SK on’s Head of Purchasing, Shin Young-ki, and L&F's Chief Operating Officer (COO), Lee Byung-hee. Both parties will discuss actual supply volumes and schedules to move toward long-term supply contracts.
Through this collaboration, SK on plans to quickly establish production capacity for LFP batteries in the U.S. market and accelerate its entry into the ESS sector. The surge in demand is partly driven by the increasing number of artificial intelligence (AI) data centers across the U.S., which significantly boosts ESS needs.
Market research firm BloombergNEF projects the U.S. ESS installed capacity to grow from 19 gigawatts (GW) in 2023 to 133 GW by 2030 and 250 GW by 2035, indicating a substantial rise in LFP battery demand. According to the International Energy Agency (IEA), LFP batteries accounted for approximately 80% of the global ESS market in 2023, thanks to their low cost and excellent safety features.
In response to these trends, the battery industry worldwide is accelerating the development of LFP production facilities in the U.S. SK on also views localization as a key strategy, leveraging North American manufacturing lines to establish a transition to local production.
Shin Young-ki stated, “This agreement is a proactive move to respond to the North American market and signifies an important turning point in strengthening SK on’s LFP value chain. We will focus on producing cost-competitive LFP batteries that meet the U.S. government’s Advanced Manufacturing Productivity Credit (AMPC) requirements to secure our position.”
SK on has been actively developing LFP technology as part of its portfolio diversification strategy. In 2023, during the ‘InterBattery’ exhibition, SK on unveiled the industry’s first LFP prototype. Since then, it has demonstrated advanced LFP batteries such as the ‘Winter Pro’ model, designed for cold-weather performance, and long-life variants, continually building its technological expertise.
