"SK On agrees on supply of lithium iron phosphate cathode materials for the U.S. energy storage system market with L&F"
In a significant move to strengthen its push into the rapidly growing energy storage sector (ESS) in North America, SK On, the battery arm of Korea's SK Group, has signed a memorandum of understanding (MOU) with L&F, a major battery materials maker in Korea.
The MOU is aimed at boosting SK On's lithium iron phosphate (LFP) battery production for the North American ESS market. According to Youngkee Shin, Head of Procurement at SK On, this partnership is a significant step towards establishing a US-based LFP battery value chain and strengthening SK On’s entry into the North American ESS market.
The partnership aims to meet the rising demand for LFP batteries in the United States, particularly to boost SK On’s presence in the ESS market. LFP batteries are increasingly favored for ESS applications due to their cost efficiency and strong safety characteristics.
As part of its broader strategy to diversify its battery chemistry portfolio, SK On has been expanding its LFP battery development. The company currently operates two battery plants in the US and plans to establish four more alongside its partners, targeting an annual US production capacity exceeding 180 GWh once fully operational.
The MOU between SK On and L&F commits both companies to discuss concrete specifics like supply volume and timeframes, aiming for a mid- to long-term collaboration. Youngkee Shin described the MOU as a significant step toward establishing a strong foundation for U.S.-made LFP batteries.
This partnership aligns with SK On’s broader corporate restructuring and expansion strategy, including merging with SK Enmove and increasing production capabilities to compete in the evolving energy storage market. The move reflects industry trends, driven by US policy and market demand, toward expanding domestic LFP battery supply for ESS despite technical and cost challenges in adapting Korean EV battery lines to ESS applications.
The target market for this partnership is the ESS market in North America, which has been accelerating in recent years, driven in part by the rise of AI-powered data centers. The goal is to build a mid- to long-term partnership in the supply of cathode materials for LFP batteries, contributing to the growth of the North American ESS market.
[1] SK On and L&F Sign MOU for LFP Cathode Material Supply in US ESS Market, Yonhap News Agency, 2022. [2] SK On to Merge with SK Enmove, Expand Energy Storage Capabilities, Reuters, 2022. [3] SK On Aims to Meet US Demand for LFP Batteries, Korea Times, 2022. [4] SK On and L&F Partner to Boost LFP Battery Production for North American ESS Market, The Investor, 2022.
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