South Korean battery manufacturer SK On announced the signing of a memorandum of understanding with South Korean materials manufacturer L&F. The goal is to supply lithium iron phosphate (LFP) cathode materials for the North American market. SK On plans to leverage this partnership to establish a stable supply chain for energy storage systems (ESS) and strengthen its position in the United States.
Rapid increase in ESS demand expected
As part of the agreement, SK On will work with L&F to determine delivery quantities and terms, with the goal of establishing a medium- to long-term partnership. This step comes amid growing demand for energy storage systems in the United States, partly driven by the expansion of AI data centers. SK On expects ESS capacity, and thus demand for battery cells, to rise rapidly over the next decade. According to the International Energy Agency, LFP batteries accounted for approximately 80 percent of the global ESS market in 2023 already.
180-gigawatt-hour production capacity
SK On plans to convert existing production lines for LFP manufacturing to advance its localization strategy in the United States. The company currently operates two plants in the U.S. and is building four more with partners. Once completed, the facilities are expected to have an annual production capacity of more than 180 gigawatt-hours.
