Key points
- SK On landed a 9 GWh US battery supply contract that Korean media estimates is worth about 1.5 trillion won, or $1.09 billion.
- The order is nine times larger than the 1 GWh US storage deal the company signed last September.
- SK Innovation closed at 125,500 won, up 7.36%, on a day the Kospi gained 0.46%.
SK On has signed the largest energy storage battery order it has announced, and it has nothing to do with electric cars.
The battery maker, which is the battery arm of SK Innovation, agreed to supply 9 gigawatt-hours of lithium iron phosphate pouch cells to NeoVolta Power, an American energy storage company, from 2027 through 2031. The two sides signed at SK On's Gwanhun campus in Jongno-gu, Seoul on August 27, and the announcement came on August 31. Neither company disclosed the value. The Korean press puts it at about 1.5 trillion won, roughly $1.09 billion, according to Hankyung (Korean language).
SK Innovation shares closed at 125,500 won, about $91, up 7.36%. The Kospi rose 0.46% the same day.
Why this order is different
SK On has been selling batteries into the American storage market for less than a year, and it started small. Its first US contract, signed last September with a company called Flat Iron, covered 1 GWh. This one is nine times larger.
It also arrives with a second half attached. Alongside the 9 GWh supply agreement, the companies set up a framework under which SK On would supply another 9 GWh and NeoVolta would build storage packs that SK On then buys back. If that fills out, the two would be working on 18 GWh together.
SK On told Korean reporters it is targeting 20 GWh or more in global storage orders this year. One contract just covered close to half of that.
Choi Dae-jin, who runs SK On's energy storage business unit, said the company would "strengthen its North American market position on the basis of local production capability and customized battery solutions." That quote is translated from Korean.
The batteries are made in Georgia
The cells for this order come out of SK On's plant in Georgia, not out of Korea. That detail is doing more work than it looks like.
American energy storage buyers are under pressure to source domestically, and a Korean supplier with US factories can sell into that requirement in a way an exporter shipping from its Seosan plant cannot. SK On already has roughly 100 GWh of North American capacity across its Georgia and Tennessee sites and its joint venture with Hyundai and Kia, capacity that was built for electric vehicles during a demand forecast that did not hold up.
Storage is what that idle capacity gets used for. An EV battery line and a storage battery line are not identical, but they are close enough that a company sitting on unused American plants has an obvious reason to chase storage orders, and lithium iron phosphate is the cheaper chemistry those orders tend to want.
What it says about the Korean battery makers
The Korean battery industry spent several years building for an electric vehicle market that grew more slowly than planned. SK On has been the most exposed of the three big Korean makers, and it has been reorganizing around that reality, including a merger with SK Enmove last year.
Storage demand, driven largely by data centers and grid buildout, has become the replacement story. SK On is not the leader there. LG Energy Solution and Samsung SDI both moved into storage earlier, which is why the Korean coverage of this deal keeps describing SK On as a late entrant, as Herald Business put it (Korean language).
At home the company has been doing better. SK On took 284 megawatts in Korea's second central contract auction for storage, a 50.3% share.
SK On is not separately listed. It remains inside SK Innovation, which is where Monday's 7.36% move showed up. A long-discussed SK On listing has not happened.
Deliveries on this contract begin in 2027. The US side of the same agreement, including how the counterparty stock reacted, is covered in our piece on NeoVolta.
