US-based SK On signs agreement with L&F for supplying LFP cathode materials, focusing on the US stationary energy storage (ESS) market.
SK On and L&F Partner to Boost LFP Battery Production for North American ESS Market
SK On, the battery arm of Korea's SK Group, has entered into a significant partnership with L&F, a major battery materials producer from South Korea. The collaboration aims to meet the growing demand for lithium iron phosphate (LFP) batteries in the United States and advance SK On’s entry into the energy storage systems (ESS) sector there [1][2][5].
Under the agreement, SK On and L&F plan to discuss details such as supply volume and period [1]. The MOU sets the stage for discussions on a mid- to long-term LFP cathode materials supply partnership focused on the North American market [1].
Shin Young-kee, head of procurement at SK On, has made a statement about the MOU, expressing a desire to establish a strong foundation for U.S.-made LFP batteries [6]. SK On plans to boost localization and build LFP battery manufacturing capacity by upgrading existing production lines in the US. The company currently operates two battery plants there and aims to add four more with partners, eventually reaching over 180 GWh annual capacity [1].
The collaboration is part of SK On’s strategic move to diversify supply chains and hedge against raw material volatility, focusing on ESS growth driven by renewable energy and data center demand growth [3]. ESS installations in the U.S. have been accelerating in recent years, driven in part by the rise of AI-powered data centers [4]. LFP batteries are increasingly favored for ESS applications due to their cost efficiency and strong safety characteristics [4].
The partnership benefits from favorable U.S. policy shifts that restrict Chinese-made materials, positioning Korean suppliers like L&F and SK On to capture a larger ESS market share [5]. Both companies are working to finalize ESS supply contracts potentially by the second half of 2025, indicating accelerating commercialization efforts [2].
In summary, SK On and L&F’s partnership is at the MOU stage but actively progressing toward commercial supply of LFP cathode materials for the US ESS market, supported by plans to expand domestic manufacturing capacity and align with U.S. supply chain intents [1][2][5]. The rise of data centers requires reliable, scalable energy storage solutions, and this partnership could play a crucial role in meeting that demand.
This partnership between SK On and L&F focuses on utilizing technology to produce LFP batteries, a move that aligns with the growing demand for energy storage systems (ESS) in the US business sector. The strategic collaboration aims to supply LFP cathode materials for the nation's ESS market, supported by SK On's ambition to boost localization and expand domestic manufacturing capacity in the US, all while capitalizing on the shift in US policies that favor suppliers over Chinese-made materials.
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