SK On plans to produce a new, lithium-iron-phosphate electric vehicle battery by 2025. The move is part of an effort to deliver lower-cost batteries to automakers squeezed by rising EV costs. LFP batteries can be produced at lower cost, but deliver less range than comparable nickel-cobalt batteries.
“By 2025, we’ll have an LFP product,” Jason Lee, executive vice president and head of SK On’s battery marketing group, told Reuters on the sidelines of the CES show. SK On is a subsidiary of SK Innovation, a South Korean energy company. Ford Motor Co, an SK On client, announced this year that it wants to offer Chinese-made lithium iron batteries from CATL in its Ford F-150 Lightning electric vehicle next year. Tesla Inc. and Rivian, an electric vehicle company, have both declared intentions to employ LFP batteries.
Chinese battery manufacturers dominate global LFP output, aided by high demand from domestic cars. LFP batteries are less expensive to manufacture but have a shorter range than equivalent nickel-cobalt EV batteries.
According to Lee, the cost advantage of lithium-iron chemistry is dependent on where the batteries are manufactured. LFP batteries produced in China can save up to 20% over nickel cobalt batteries. He claims that LFP batteries manufactured in Europe might be 15% less expensive.
South Korean SK
SK Lee stated that the company intends to first obtain its LFP batteries from China. “There is no gain if you produce in the United States,” he remarked. SK On is investing in new battery installations in the United States and intends to have 150 gigatonne-hours of capacity by 2026. Lee stated that these efforts, as well as investments in cathode manufacturing in the United States, should enable SK On’s U.S. clients to achieve domestic content criteria associated with U.S. EV subsidies.
Battery manufacturers and automakers are increasing EV battery capacity internationally, prompting some industry analysts to ask if this would result in oversupply. Lee believes there will be no overstock in the foreseeable future. SK On’s new plants were established with promises from automakers that the batteries will be accepted, he said.
One of SK On’s key concerns, according to Lee, is raising the finance necessary to make increases in capacity and novel chemistries.
“We are considering obtaining further funds,” Lee stated.
(Joe White in Las Vegas and Heekyong Yang in Seoul contributed reporting, and Muralikumar Anantharaman edited the piece.)
SK Group (Korean: SK, ) is South Korea’s second largest chaebol after Samsung Group. The SK Group is made up of 186 companies and affiliates that share the SK brand name and the SKMS management culture (SK Management System).
At Truoosh, we’re here to help you navigate this overwhelming world of stuff. All of our market picks are independently selected and curated by the editorial team. All product details reflect the price and availability at the time of publication. If you buy something we link to on our site, Truoosh may earn commission.