SK On secures massive LFP supply and offtake deal with NeoVolta Power in US

South Korean battery major SK On has inked a dual-sided agreement with US-based NeoVolta Power to supply 9 GWh of lithium iron phosphate (LFP) pouch cells for battery energy storage systems (BESS) between 2027 and 2031.

The deal is uniquely circular, as the two companies also outlined a framework where SK On will repurchase the completed energy storage packs from NeoVolta, using the latter’s expertise in packaging.

The pair called this an 18 GWh deal all within the USA, though the 9 GWh is effectively moving twice. SK On declined to confirm the exact value in its corporate release.

SK On’s move is a deliberate shift for a manufacturer that historically built its US footprint on NMC chemistry for the automotive sector. Its South Korean peers, LG Energy Solution and Samsung SDI, have also run the same playbook, shifting quiet or idle EV lines into stationary storage to keep factory utilization high as subsidies and expectations for electric vehicles have slowed.

It fits to SK On’s target of securing more than 20 GWh of global ESS orders this year, as it last secured a 7.2 GWh LFP supply deal struck with US-based Flatiron Energy Development last year.

NeoVolta Power indicated it will use the initial 9 GWh of cells to scale its domestically produced BESS solutions aimed at utility-scale, as well as commercial and industrial applications. Operating out of Pendergrass, Georgia, NeoVolta has logistical advantages in assembling Inflation Reduction Act-compliant systems.

SK On and NeoVolta Power held a signing ceremony on August 27 at SK On’s headquarters in Seoul.

What they said:

“SK On’s battery cell technology and U.S. manufacturing capabilities, combined with NeoVolta Power’s energy storage expertise and manufacturing capabilities, provide a strong foundation for this strategic partnership,” said Steve Bond, President of NeoVolta Power. “We expect this collaboration to accelerate growth for both companies in the BESS market and help address rising demand in the U.S.”

“This partnership strengthens SK On’s position in the U.S. BESS market and brings together SK On’s U.S.-made LFP battery technology with NeoVolta Power’s growing energy-storage manufacturing capabilities,” said Daejin Choi, Head of ESS Business at SK On. “We view NeoVolta Power as a strategic partner as we expand our presence in the U.S. energy-storage market. By combining our respective capabilities, we will pursue new commercial opportunities and deliver competitive BESS solutions that meet evolving market needs.”