SK On, a South Korean battery supplier, has entered a supply agreement with US-based Flatiron Energy Development for lithium iron phosphate (LFP) batteries, marking its entry into the energy storage systems (ESSs) market.

The deal, which spans from 2026 to 2030, involves the provision of up to 7.2GWh of ESS batteries, according to a Reuters report.

SK On, which currently provides batteries to companies such as Hyundai Motor, Kia, and Ford Motor, has not disclosed the financial details of the contract.

SK On aims to start mass production of ESS-dedicated LFP batteries in the latter half of next year (H2), and is preparing to adapt some of its electric vehicle (EV) battery production lines in Georgia for ESS purposes.

“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,” the company stated.

Additionally, the company intends to establish LFP production facilities in South Korea.

This reflects a growing trend among EV battery manufacturers to venture into the ESS domain as a buffer against fluctuating EV demand, highlighted the news agency.

Last month, South Korea's nuclear power output exceeded expectations, with a year-on-year increase of 8.7% for the first half of 2025, significantly outpacing the official target of 2.9% annual growth.

Korea Electric Power Corp attributes this surge to reduced maintenance outages, the commissioning of the 1.4GW Shin Hanul #2 plant, and the full-capacity operation of existing reactors.

This has reportedly lowered generation costs and also diminished the country's reliance on coal.