SK On to order LFP lines at Seosan plant to speed ESS push

(SK On)

SK On is moving to build lithium iron phosphate (LFP) battery production facilities for energy storage systems (ESS) at its Seosan plant, aiming to capture fast-growing ESS demand as electric vehicle sales face a prolonged slowdown.

According to industry sources on Sunday, SK On plans to place orders for LFP battery equipment at its Seosan facility as early as the first quarter. The company is expected to speed up construction to complete ESS battery production lines in the second half of this year, with mass production of LFP pouch cells slated to begin early next year.

SK On currently operates two EV battery plants in Seosan — a first plant with annual capacity of 1 gigawatt-hour and a second with 6 gigawatt-hours. Industry watchers expect part of the second plant’s lines to be converted for ESS battery production. Once the conversion is completed, SK On would secure LFP battery capacity of up to 3 gigawatt-hours, the largest such scale in South Korea.

LFP batteries are considered safer than ternary batteries using nickel, cobalt and manganese (NCM), which are mainly deployed in electric vehicles, making them the preferred choice for ESS applications. As a result, competition to secure the ESS market has intensified.

LG Energy Solution plans to begin LFP battery production next year at its Ochang energy plant, starting with annual capacity of 1 gigawatt-hour, while Samsung SDI is building an LFP mother line at its Ulsan plant.

The South Korean government has also laid out plans to roll out 23 gigawatts of ESS nationwide by 2038, backed by total investment of 40 trillion won ($27.6 billion), further fueling growth expectations for the domestic ESS battery market.