Key Points:
- SK On signed a five-year contract valued at approximately 1.5 trillion won ($1.1 billion) to supply battery cells to U.S.-based NeoVolta Power.
- The agreement secures 9 gigawatt-hours of lithium iron phosphate pouch cells to be manufactured at SK On’s Georgia plant from 2027 to 2031.
- The companies are planning an additional 9 GWh tolling arrangement that could expand total cooperation to 18 GWh, worth 3 trillion won ($2.2 billion).
- The contract helps SK On achieve half of its annual 20 GWh global energy storage target while pivoting factory lines away from slowing EV demand.
South Korean battery manufacturer SK On has secured a landmark multi-billion-dollar supply contract in the United States energy storage system market. The company signed a definitive five-year agreement to supply 9 gigawatt-hours of lithium iron phosphate pouch battery cells to American energy storage specialist NeoVolta Power. Valued by industry analysts at approximately 1.5 trillion won, or roughly $1.1 billion, the deal represents the largest energy storage contract the battery maker has won in North America.
Under the terms of the agreement, the battery cells will be delivered over a five-year period stretching from 2027 through 2031. Sourcing and manufacturing will take place entirely on American soil at SK On’s high-capacity battery manufacturing facility in Commerce, Georgia. NeoVolta Power, which operates its own production hub in Pendergrass, Georgia, will integrate the pouch cells into next-generation commercial, industrial, and residential energy storage systems.
To fulfill the contract, the South Korean battery manufacturer is actively converting select automotive battery lines at its Georgia complex into dedicated energy storage production lines. Retooling work will begin during the second half of the year. The newly converted lines will first manufacture cells for renewable energy developer Flatiron Energy under an earlier commercial agreement before ramping up dedicated production runs for NeoVolta Power.
Beyond the initial 9 GWh supply contract, the two companies agreed to expand their strategic alliance significantly. The partners plan to finalize a separate agreement later in the year for an additional 9 GWh of battery cells under a customer-supplied materials framework. Under this arrangement, SK On will provide raw cells to NeoVolta Power, which will assemble them into finished battery packs that SK On will purchase back and distribute to its own commercial clients. If finalized, total cooperation between the two firms will scale to 18 GWh, lifting the cumulative contract value near 3 trillion won ($2.2 billion).
The contract marks a critical milestone for SK On’s corporate strategy, allowing the manufacturer to achieve half of its 20 GWh global energy storage order target for the year with a single commercial agreement. Securing a long-term supply customer provides steady production volumes and ensures high factory utilization rates across its American operations for the next five years.
The multi-billion-dollar deal illustrates a broader strategic transformation across the global battery sector. For years, South Korean manufacturers concentrated capital almost exclusively on high-nickel nickel-manganese-cobalt batteries tailored for high-performance electric vehicles. However, as consumer adoption of passenger electric vehicles moderates across Western markets, battery makers are aggressively pivoting toward lithium iron phosphate chemistry for stationary energy storage systems, where cycle life, thermal stability, and low cost matter far more than driving range.
Demand for grid-scale energy storage systems is accelerating rapidly across the United States. The explosive construction of artificial intelligence data centers, combined with national power grid modernization and rising renewable wind and solar installations, requires massive battery storage banks to prevent grid instability and absorb intermittent clean energy. Supplying domestic battery cells from Georgia allows developers to stabilize local power grids while avoiding international shipping bottlenecks.
Localizing manufacturing in Georgia provides major regulatory and trade advantages. Sourcing battery cells produced in the United States enables energy storage developers to comply with federal domestic content rules and avoid steep import tariffs on battery cells imported from China. Furthermore, locating cell production and pack assembly within the same regional manufacturing corridor in Georgia minimizes transportation expenses and lowers the overall carbon footprint of finished energy systems.
As the global energy transition accelerates, SK On’s billion-dollar partnership with NeoVolta Power cements the battery maker’s position as a major player in the North American clean energy economy. By successfully diversifying factory lines into lithium iron phosphate energy storage cells, the company is insulating its business from electric vehicle market fluctuations. Moving forward, the multi-gigawatt supply pipeline ensures that American-made battery technology will play an essential role in stabilizing power grids and fueling the next generation of digital infrastructure.
