SK On Signs $815 Million Battery Materials Deal With Posco Future M
The three-year agreement will supply SK On with Korean-made lithium iron phosphate cathode materials for energy storage batteries produced in Georgia, strengthening a North American supply chain designed to reduce reliance on China.
South Korean battery maker SK On has agreed to buy 1.1 trillion won, or about $815 million, of lithium iron phosphate cathode materials from Posco Future M, creating a domestic partnership aimed at serving the fast-growing US energy storage market.
Under the agreement signed Tuesday, Posco Future M will supply the materials for three years from 2027 through 2029. SK On plans to use them to manufacture lithium iron phosphate, or LFP, batteries for energy storage systems at its plant in Georgia. The companies also intend to discuss extending the arrangement beyond 2029 as their partnership develops.
The deal gives SK On a route to secure a key battery input through a supply chain designed to exclude China. Posco Future M will source lithium from salt flats in Argentina through Posco Group’s raw-material network. The materials producer is also converting part of its high-nickel cathode production capacity in Pohang to make LFP cathode materials, with mass production scheduled to start by the end of 2026. It plans to use a new production process intended to improve both quality and cost competitiveness.
LFP batteries typically compete on cost, durability and safety, making them well suited to stationary energy storage, where weight and driving range are less important than in passenger electric vehicles. The agreement therefore reflects a broader shift among Korean battery companies toward diversifying beyond higher-nickel chemistries and electric-vehicle demand. It also positions the two suppliers to capture rising US investment in storage capacity as renewable generation expands and power grids face heavier loads.
SK On has already been building its North American energy storage business. In August, it signed an agreement to supply LFP battery cells to US energy storage company NeoVolta Power. That followed a supply agreement with US renewable energy developer Flatiron Energy Development in September 2025.
Kim Sung-tan, SK On’s head of raw materials procurement, said the company is focused on developing a non-China supply chain and improving its competitiveness in core materials as global energy markets change and US demand for energy storage grows. He added that SK On would pursue stable procurement and expand its storage business through strategic partnerships.
For Posco Future M, the contract provides a major customer as it adds LFP materials to a portfolio long associated with high-nickel products. For SK On, the tie-up offers greater visibility over costs and supply just as the company increases its exposure to a market segment expected to become an important second pillar alongside batteries for electric vehicles.