South Korean battery manufacturer SK On has entered into a major long-term supply agreement with US-based energy storage company NeoVolta Power, securing a deal that will see it deliver lithium iron phosphate (LFP) pouch cells for grid-scale storage systems, as the company doubles down on the rapidly expanding North American stationary storage market.

Under the terms of the preliminary master agreement, SK On will supply a total of 9 GWh of LFP pouch cells to NeoVolta Power over a five-year period from 2027 through 2031, with all production slated to come from SK On’s manufacturing facility in Georgia, United States.

Industry estimates value the contract at roughly 1.5 trillion Korean won (approximately $7.3 billion USD), though neither party has publicly disclosed the exact financial terms of the deal.

Beyond the base 9 GWh commitment, the two companies are also exploring a significant expansion of their partnership, with a target to scale total collaboration volume to 18 GWh. SK On aims to finalise a second supply agreement before the end of this year, adding an extra 9 GWh of cell deliveries.

The arrangement follows an OEM-style cooperation model: SK On supplies the cells, while NeoVolta Power handles battery pack assembly. The completed storage packs are then sold back to SK On for downstream integration.

Industry observers note that this structure leverages the complementary strengths of both players – SK On brings its cell technology expertise, while NeoVolta Power contributes local assembly capabilities – while keeping upfront capital expenditures in check and mitigating operational risks.

This marks SK On’s second large-scale ESS order in North America, following an earlier 1 GWh supply contract with Texas-based Flatiron Energy.

Historically focused on high-nickel electric-vehicle batteries, SK On has been pivoting toward LFP-based energy storage solutions. The shift is driven by surging demand from AI data centre construction and grid modernisation projects across North America, which have turned the region’s utility-scale storage segment into a new growth frontier – and a valuable hedge against the persistent headwinds facing the EV battery industry.

For SK On, long-term volume-locked US orders carry substantial strategic weight. Stable multi-year offtake agreements ensure sustained output from its American plants, boost line utilisation rates, and improve the overall profitability of its overseas operations.

“This partnership solidifies SK On’s position in the US energy storage systems market, combining our locally manufactured LFP cell technology with NeoVolta Power’s growing storage manufacturing capabilities,” said Dae-jin Choi, head of SK On’s energy storage business. “NeoVolta Power is a critical strategic partner in our US market expansion.”

To capture the US storage opportunity, SK On has been strengthening its local footprint. In June this year, the company launched Gridon, a dedicated storage brand, in Texas.

A robust domestic production base underpins this push. SK On has a total of 100 GWh of battery capacity planned across the US, including its own facilities in Georgia and Tennessee, as well as a joint-venture plant with Hyundai Motor Group also located in Georgia. This localised cell production aligns with US supply-chain policy requirements and positions the company well for further contract wins.