SK On seeks to enter US energy storage market with American-made batteries
'We aim to secure orders for energy storage systems within this year, focusing on the US market,' said SK On CEO Lee Seok-hee at the general meeting of shareholders of its parent company, SK Innovation.
'To make the best use of our plant (in the US), we will harness a portion of the lines at the facility there,' he added, implying that some of the electric vehicle battery lines in the US would be repurposed for energy storage system battery production.
SK On currently operates two plants, with four more under construction in joint ventures with automakers in the US. Together, these facilities have a combined capacity of over 180 gigawatt-hours annually, dedicated to EV batteries.
'Recently, the ESS market has been utilizing lithium iron phosphate (LFP) material. So, we will enter the US market with LFP batteries in pouch form, which we have expertise in producing,' CEO Lee added.
Previously focused on EV batteries, Korean battery-makers are now expanding their business toward energy storage solutions to combat declining sales amid sluggish global EV demand.
SK On recorded losses for 11 consecutive quarters until the third quarter of 2024, when it swung into the black.
As SK On is entering the ESS market later than Korean rivals LG Energy Solutions and Samsung SDI, the company has not yet secured any orders for its ESS products. However, Lee said that the company has been receiving inquiries from within the US regarding its ESS business, driven by increasing environmental concerns.
Regarding its core business of EV batteries, Lee said SK On has finished preparations to produce more affordable midnickel batteries — nickel-cobalt-manganese batteries with a nickel proportion between 40-60 percent — as well as all battery form factors, expanding from its premium pouch batteries.
However, he added, the company will begin production of other form factors only when demand has been assured, due to the requirement of additional facility investment.
Along with Lee, SK Innovation CEO Park Sang-kyu and SK E&S CEO Choo Hyeong-wook also participated in the meeting held in Seoul.
The meeting addressed items on the agenda including the approval of the 2024 financial statements and a total wage cap of 10 billion won ($6.8 million) for its directors.
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