SK On signs 9GWh battery cell supply deal with U.S. NeoVolta Power, worth 1.5 trillion won

[Financial News] SK On has won a large battery cell order in the U.S. energy storage system (ESS) market for the first time this year, laying the groundwork for its business expansion in North America.
On the 31st, SK On said it signed a battery cell supply agreement for ESS use with U.S. ESS company NeoVolta Power on the 27th at its Gwanhun Campus in Jongno-gu, Seoul. Choi Dae-jin, head of SK On's ESS business division, and Steve Bond, president of NeoVolta Power, attended the signing ceremony.
Under the deal, SK On will supply NeoVolta Power with a total of 9 gigawatt-hours (GWh) of LFP pouch battery cells over five years from 2027 to 2031. The cells will be produced at SK On's plant in Georgia. Industry sources estimate the contract to be worth about 150 billion won.
With this order, SK On has secured a long-term supplier for LFP batteries used in North American ESS projects. The company also expects the deal to broaden its customer base in the fast-growing U.S. ESS market. In particular, being selected as the key cell supplier for NeoVolta Power's ESS products based on LFP pouch batteries is seen as recognition of SK On's technological competitiveness and local production capabilities in the U.S.
SK On has been expanding its business structure beyond high-nickel batteries for electric vehicles into LFP batteries for ESS. The five-year order also gives the company stable volume and should help raise utilization at its Georgia plant. It is also expected to improve profitability by diversifying its customer base.
The two companies plan to broaden their cooperation further. If SK On supplies an additional 9GWh of cells through a separate contract later this year in a consignment arrangement, NeoVolta Power will turn them into pack products, its specialty, and buy them back. If that happens, the total cooperation volume between the two companies will rise to 18GWh.
Choi Dae-jin, head of SK On's ESS business division, said, "This contract will further strengthen SK On's position in the U.S. ESS market." He added, "Based on our local production capabilities and battery solutions tailored to customer demand, we will continue to expand new customers and business opportunities." Steve Bond also said, "SK On's battery technology, its production capabilities in the U.S., and NeoVolta Power's ESS manufacturing expertise form the basis of this strategic partnership." He added, "We expect to respond effectively to rising demand in the U.S. and accelerate the expansion of both companies' ESS businesses."
NeoVolta Power is an ESS manufacturer with a production facility in Pendergrass, Georgia, and a subsidiary of U.S. energy technology company NeoVolta.
This is not SK On's first move to expand in the ESS market. In February, it won 284MW, or 50.3%, of the total 565MW in South Korea's second centralized ESS contract market bidding round. In the U.S., it signed a 1GWh supply deal with renewable energy developer Flatiron in September last year.
The company is now moving more aggressively into the U.S. market. In June, it held a customer event in Texas and unveiled its ESS product brand, GRIDON, for the first time. The name means "turning on the power grid" and reflects the company's goal of contributing to the energy transition by helping stabilize the grid.
Its production base is already in place. SK On has about 100GWh of U.S. manufacturing capacity through SK Battery America, Inc., SK On Tennessee, and HSBMA, its joint venture with Hyundai Motor Group.
[email protected] Kim Dong-chan Reporter