SK On enters US energy storage market with Flatiron deal for up to 7.2 GWh

A Massachusetts order starts a wider US push

SK On has signed an agreement with Flatiron Energy Development to supply up to 7.2 gigawatt hours of lithium iron phosphate batteries for US energy storage projects from 2026 through 2030. The South Korean battery maker will begin with 1 GWh of containerized storage for a Massachusetts project, with shipments scheduled for the second half of 2026.

The agreement is SK On's first major order for lithium iron phosphate batteries, known as LFP, dedicated to energy storage systems, or ESS. It gives the company a foothold in a market serving renewable energy projects, data centers and programs to modernize electricity grids, as battery manufacturers adjust to slower growth in electric vehicle demand.

The potential 7.2 GWh total has two parts: the initial 1 GWh delivery and a right of first refusal covering another 6.2 GWh of Flatiron projects across the United States through 2030. That arrangement gives SK On the opportunity to supply additional projects as they move toward construction. The full potential volume depends on those rights being exercised.

SK On plans to convert some electric vehicle battery production lines at SK Battery America in Commerce, Georgia, to make LFP cells for storage. Mass production is scheduled to begin in the second half of 2026, matching the first delivery window. The company also plans LFP manufacturing in South Korea.

For Flatiron, a US developer and operator of large battery projects, the agreement brings a manufacturing partner with a local production base. For SK On, it creates another outlet for battery production beyond the automotive market and connects its factory plans to a pipeline of storage installations.

What the agreement covers

SK On will supply containerized battery energy storage units. Inside the containers, pouch cells are assembled into high voltage modules. The arrangement uses space efficiently and allows a developer to increase a project's storage capacity by adding standardized blocks.

A gigawatt hour measures how much electricity a battery can store, rather than how quickly it can deliver that electricity. The potential 7.2 GWh program could equip roughly 30 to 40 installations of 200 megawatt hours each. Projects of that size commonly supply electricity for two to four hours during evening peaks, when demand is high.

SK On did not disclose the contract value. Estimates published in Korean and US trade coverage put the full potential program at about $1.4 billion to $1.5 billion, reflecting its size and deliveries over several years.

The agreement provides a schedule for the first shipment and a framework for later projects. The right of first refusal gives SK On visibility into possible demand as Flatiron developments reach notice to proceed, the stage at which a project is authorized to move ahead. Flatiron gains a manufacturing partner that can plan production around its construction schedule.

SK On described the move as a way to broaden its product range, reduce its dependence on the automotive cycle and build a durable storage business. In a company statement, it said:

The LFP battery production for energy storage systems expects to further strengthen our product lineup and business portfolio and to effectively respond to the temporary slowdown in electric vehicle demand, and accelerate stable growth.

Why LFP suits batteries on the grid

Lithium iron phosphate has become a favored chemistry for stationary storage because of its cost, durability under repeated charging and discharging, and resistance to thermal runaway compared with chemistries containing more nickel. Thermal runaway is a failure in which rising heat inside a cell can feed further heating and spread to nearby cells.

Grid batteries often charge and discharge every day. Their owners need equipment that can repeat that process for years with limited downtime. LFP cells generally withstand more complete charging cycles before their capacity falls to a specified threshold, an advantage when a project's earnings depend on frequent use.

Nickel manganese cobalt batteries, known as NMC, and related chemistries store more energy for a given weight or volume. That helps an electric vehicle travel farther on a charge. A container standing on a concrete pad beside a substation faces fewer weight and space restrictions than a passenger car, making LFP's lower energy density less of a disadvantage.

LFP also avoids nickel and cobalt. That helps reduce material costs and exposure to volatile mining supplies. For project developers, the chemistry offers a way to limit dependence on markets that can experience sharp price swings and are concentrated in a small number of countries.

Storage operators can earn money by charging when wholesale electricity prices are low and discharging when prices rise. The difference between those prices helps pay for the installation. Battery life matters because each charging cycle contributes to wear, while the business depends on repeating those cycles reliably.

Safety features and early warning checks

SK On says its storage units will use a modular design with features intended to prevent heat from spreading between parts of the system. Containing a failure in one cell or module is especially important when many batteries are installed together.

The company also plans health checks based on electrochemical impedance spectroscopy, or EIS. This technique examines a battery's electrical response to help identify changes in its internal condition. Such checks can reveal patterns of cell deterioration early and help reduce the chance that an isolated failure spreads through a module or rack.

Stationary storage installations must meet strict fire codes and utility requirements. Container layouts combine gas detection, ventilation and fire suppression systems, with testing against standards accepted by insurers and local authorities.

Safety is especially relevant for indoor installations and urban sites, where equipment must operate close to buildings and other infrastructure. SK On's focus on thermal containment and diagnostics addresses concerns that developers, insurers and asset owners consider when selecting a supplier.

Insurers examine cell design, the way cells are assembled into packs and the measures used to isolate faults. Large deployments are also judged on performance across thousands of cycles. Consistent manufacturing quality will therefore matter alongside the safety features built into each container.

Georgia and South Korea form the production plan

SK Battery America's Commerce facility is central to the US supply strategy. Converting part of the plant from electric vehicle batteries to LFP cells for storage would give SK On a domestic source for projects whose customers prefer or require cells made in the United States.

Local production can shorten shipping times, reduce currency risk and help project owners qualify for higher tax credits where domestic content rules apply. It can also make delivery planning easier for developers coordinating equipment arrivals with construction and grid connection work.

SK On is pursuing local supplies of key materials as well. In July 2025, it signed a memorandum of understanding with L&F targeting LFP cathode materials for North America. The cathode is one of a battery's main internal components and helps determine its chemistry and performance.

Adding cathode materials and other components sourced within the region could improve cost stability and reduce exposure to changes in trade policy. SK On operates two US battery plants and has outlined plans to add capacity with partners, potentially giving it more flexibility to allocate production lines between electric vehicles and storage as demand changes.

South Korea remains part of the plan. Establishing LFP production there would give SK On another manufacturing base for export markets, while Georgia would serve customers seeking US production.

The announced schedule brings together the materials initiative, factory conversion and first shipment:

• July 2025: SK On signed a memorandum of understanding with L&F targeting LFP cathode materials for North America.
• Second half of 2026: SK On plans to begin mass production of LFP cells for energy storage and start shipments for Flatiron's Massachusetts project.
• 2026 through 2030: The supply program covers an initial 1 GWh and rights covering another 6.2 GWh of US projects.

Why battery manufacturers are turning to storage

Electric vehicle sales growth has cooled from the rapid pace of recent years. Higher interest rates, reductions in some incentives and buyers who are more sensitive to price have contributed to slower sales growth in some markets. Battery manufacturers are seeking another source of demand for their factories.

Stationary storage serves a different group of customers. Wind and solar additions, expanding data centers and the need for flexible electricity supply as coal and gas plants retire are supporting demand. Batteries can absorb electricity when it is plentiful and release it when the grid needs more supply.

SK On's shift also reflects a wider industry adjustment. LG Energy Solution warned in July that electric vehicle demand could remain soft into 2026. It said it would increase ESS output while trimming or delaying some investments tied to vehicles.

Storage has become a brighter part of the battery business, with order books growing in North America and Europe. For manufacturers, serving both vehicles and stationary installations can spread exposure across markets whose purchasing cycles and customers differ.

SK On's Georgia conversion connects that business strategy to an existing factory. Its success will depend on turning production capacity originally intended for vehicles into a consistent supply of cells suited to storage projects.

Trade rules and tax credits shape procurement

US tariff increases on lithium ion batteries sourced from China are encouraging developers to consider cells from other countries and more local assembly. Tax credit rules that reward domestic content add another reason to examine where cells and components are made.

The storage investment tax credit can reach 30 percent or more for projects meeting applicable labor and domestic content requirements. A domestic production base can help developers pursue those benefits, while local sourcing gives utilities and investors more options for managing procurement and compliance risks as rules evolve.

The US storage supply chain has often combined cells imported from Asia with systems assembled by integrators in the United States. Higher tariffs and domestic content pathways are changing the economics of that arrangement, making US production and production in allied countries more attractive.

Developers are also seeking more predictable deliveries after shipping bottlenecks and component shortages. A cell supplier in Georgia can reduce transit times and help meet supply chain disclosure requirements increasingly requested by lenders and utilities.

SK On's entry gives buyers another domestic production option. Its move into LFP also changes the materials behind that supply, reducing exposure to nickel and cobalt markets while expanding the range of batteries available for grid projects.

Where Flatiron's projects fit

Flatiron Energy was founded in 2021 and develops large battery installations from the initial concept through operations. Its work includes project design, equipment procurement, construction management and operation of assets over their working lives.

That approach allows Flatiron to deliver projects serving utilities, grid operators and merchant markets, where storage owners earn revenue by selling electricity or grid services. The SK On agreement links that development work to a supplier preparing local manufacturing capacity.

Massachusetts will receive the first 1 GWh of containerized storage under the partnership. New England combines high electricity prices, a growing share of wind and solar, and capacity market payments that reward resources for being available during periods of peak demand.

The region also faces tight winter peaks and transmission constraints while pursuing ambitious clean energy goals. Batteries can help absorb surplus solar electricity around midday and respond when prices rise sharply during cold weather.

ISO New England has approved a separate project description in Flatiron's regional pipeline: an indoor battery installation in Boston rated at 300 megawatts and 1,200 megawatt hours. The power rating describes how quickly it can supply electricity; the energy rating describes how much it can store. At its full 300 MW output, 1,200 MWh represents four hours of discharge.

The initial Massachusetts delivery under the SK On agreement is described as 1 GWh, while the Boston development is listed at 1,200 MWh. The announcement gives no further detail connecting the two project descriptions.

Flatiron's pipeline extends beyond New England to other US regions where wind and solar are growing. Capacity markets and utility programs in those regions can pay storage operators for fast response and reliable availability, creating further opportunities for the supply arrangement through 2030.

What could affect delivery and performance

SK On must convert vehicle battery lines, retool equipment and introduce quality procedures suited to its storage products. Delays in that work could affect the planned start of mass production and the delivery schedule for Flatiron's first project.

Permitting and grid connections are other potential constraints, particularly where transmission networks are congested. Developers need equipment deliveries to match construction progress and the timing of permission to connect to the electricity system. That coordination can determine when an installation begins earning revenue.

Tariff rates, tax credit eligibility and supply chain disclosure rules can change project economics. More cells produced in the United States and allied countries could improve supply resilience, while competition from cheaper imports can continue to influence bids.

SK On will also compete on software, warranties and support in the field, alongside the quality of its cells. Asset owners and system integrators need equipment that works reliably and a supplier able to resolve problems throughout a project's operating life.

The first Massachusetts deliveries will put the company's modular design, diagnostics and manufacturing consistency into daily service. Maintaining production yields and quality as Georgia changes its product mix will be central to competing with established suppliers that have already delivered several gigawatt hours of storage in North America.

At a Glance

• SK On's agreement with Flatiron Energy covers up to 7.2 GWh of LFP batteries for US storage projects from 2026 through 2030.
• The first 1 GWh is intended for a Massachusetts project, with shipments scheduled to start in the second half of 2026.
• Another 6.2 GWh is covered by a right of first refusal for Flatiron projects across the United States.
• SK On plans to convert some vehicle battery lines in Commerce, Georgia, and establish LFP manufacturing in South Korea.
• The contract value was not disclosed. Published estimates place the full potential program at $1.4 billion to $1.5 billion.
• LFP offers cost, durability and safety advantages for stationary storage, where battery weight matters less than in vehicles.
• Local manufacturing, tariffs and tax credit requirements are influencing US storage procurement.
• Factory conversion, permitting, grid connections and operating performance will shape how the agreement becomes installed capacity.