SK Innovation Co.’s battery unit is in talks with multiple American data center and energy developers to supply batteries for energy storage systems, aiming to secure at least 10 gigawatt-hours of contracts in the US this year.
SK On, which counts Ford Motor Co., Hyundai Motor Co., and Kia Corp. among its customers, has been accelerating production of lithium-iron-phosphate cells widely used in energy storage systems to meet soaring demand from AI data centers and expanding renewable power capacity.
The Seoul-based company is playing catching up in the fast-growing LFP market, after initially prioritizing high-performance nickel-based batteries over what South Korean battery makers once saw as a low-tier technology dominated by China.
But inquiries have surged since it signed its first deal in September to supply LFP batteries to US-based Flatiron Energy Development, Choi Daejin, SK On’s head of ESS business, said in an interview.
Private ESS developers such as Flatiron and companies serving “hyperscalers” — tech giants like Microsoft Corp. and Meta Platforms Inc. building massive data centers — are among primary clients, he said on the sidelines of the InterBattery conference. An announcement will be made as early as this summer.
“Our goal is to secure orders for over 10 Gwh in the US this year, though the internal target assigned to me is actually much higher,” Choi said, adding the company will shift around 20% of its 100 Gwh global production capacity to ESS cells.
SK’s push into ESS comes as the battery industry adjusts to a slower electric-vehicle transition in the US, rising tariff pressure and intensifying competition from China. As they develop next-generation technologies to diversify revenue streams, LG Energy Solution Ltd. and Samsung SDI Co. are also repurposing some EV battery lines, aiming to raise ESS cell output this year to more than 60 Gwh and 30 Gwh, respectively.
The pivot comes after SK ended its joint venture with Ford in December just four years after unveiling an $11 billion plan to build three battery factories and an electric pickup assembly plant in the US. That led to a 3.7 trillion won writedown, with the company laying off more than a third of the workforce at its Georgia plant. In Korea, it has offered voluntary retirement packages and unpaid leave combined with tuition support for up to two years to employees who joined before 2025.
The ESS business will help drive a turnaround as electricity demand from data centers and renewables energy accelerates, Choi said, noting that some EV production lines in Georgia and at the Tennessee site acquired from the Ford project will be converted to ESS.
BloombergNEF forecasts demand from US data centers will more than double from 2024 to 78 Gwh by 2035, accounting for nearly 9% of the country’s entire electricity demand and outpacing growth in EVs and hydrogen. Samsung SDI has said the US ESS market is projected to reach 130 Gwh in 2030 from around 80 GWh now.
The AI-driven power boom is just beginning, opening opportunities for Korean suppliers as the US grid upgrades and buyers seek batteries made outside China, Choi said.
To win market share from Korean and Chinese rivals, SK is betting on a safety technology known as electrochemical impedance spectroscopy, which can identify abnormal signs at least 30 minutes before a thermal event, helping prevent fires at storage facilities.
The technology helped SK secure more than half the volume in a 1 trillion won ESS tender from the Korean government last month, providing momentum to its expansion in the sector.
SK is developing a higher-performance LFP battery, targeting mass production by 2028, Choi said.
“Although we are a latecomer, we’re differentiating our products to boost our market appeal,” he said, adding the company plans to showcase new technologies to demonstrate it is a serious player.
©2026 Bloomberg L.P.
This article was generated from an automated news agency feed without modifications to text.