SK On, a South Korean company, seals a deal to provide energy storage batteries with Flatiron Energy.
South Korea's SK On and LG Energy Solution, two major players in the electric vehicle (EV) battery market, have announced strategic moves to diversify their product offerings and respond to the potential slowdown in EV demand.
In a significant development, SK On, a subsidiary of South Korea's SK Group, has signed a deal with U.S.-based Flatiron Energy Development for the supply of lithium iron phosphate (LFP) batteries for energy storage systems (ESS). This marks SK On's first order for LFP batteries to use in energy storage systems.
Meanwhile, LG Energy Solution, the battery-making arm of LG Group, has announced plans to ramp up ESS production. The decision is a response to the changing market dynamics in the EV industry and a hedge against potential market fluctuations. The company did not specify the exact amount of ESS production it plans to increase, but it is expected to help stabilise its business during the potential slowdown in EV demand.
LG Energy Solution supplies batteries to major automakers such as Hyundai Motor, Kia Corp, and Ford Motor. The company plans to begin mass production of ESS-dedicated LFP batteries in the second half of next year, and some of its EV battery production lines in Georgia will be converted for ESS use.
SK On will supply up to 7.2 gigawatt hours (GWh) of ESS batteries between 2026 and 2030. The company also announced CATL as their business partner for the supply of LFP batteries for energy storage systems. This move is expected to further strengthen SK On's product lineup and business portfolio.
The potential slowdown in EV demand is causing some EV battery makers to reevaluate their business strategies and focus on other areas of the battery market, such as energy storage. LG Energy Solution's decision to increase ESS production is a sign of the growing importance of energy storage systems in the battery market.
The deal between SK On and Flatiron Energy Development is a strategic move for both companies. For SK On, it represents a step towards expanding its product offerings and ensuring business continuity. For Flatiron Energy Development, it provides a reliable supplier for its energy storage needs.
In conclusion, the potential slowdown in EV demand is forcing battery makers like SK On and LG Energy Solution to adapt and innovate. By expanding into the energy storage market, these companies are positioning themselves for long-term success in the rapidly evolving battery industry.
