SK On announced its plans to provide lithium-iron-phosphate batteries cheaper batteries to counter rising costs for base materials such as cobalt.
South Korean conglomerate, SK Group’s battery vertical intends to produce a new, low-cost lithium-iron-phosphate (LFP) electric vehicle (EV) battery by 2025.
“We’re going to produce an LFP product by 2025,” Jason Lee, executive vice president and head of SK On’s battery marketing division, told Reuters on the sidelines of the CES conference. SK On is a subsidiary of the South Korean energy group SK Innovation.
The company had hinted at its plans in October last year during a conference after the release of its parent company SKI’s third-quarter earnings results. “We are developing diverse chemistries other than nickel, cobalt and manganese (NCM), according to technological trends and client requests,” SK On’s head of planning Yoon Hyung-jo told investors. “We are developing high-performance LFP batteries which have high energy density and fast charging speed, based on our technological capabilities that had led the market for high energy-density NCM batteries,” he said.
LFP batteries can be produced at lower cost, but provide lower energy density, resulting in shorter travel distances than comparable nickel-cobalt EV batteries. Currently, Chinese battery makers dominate world LFP production, supported by strong demand from home-market automakers. The world’s largest EV battery maker is China’s Contemporary Amperex Technology (CATL), which holds about 35% of the total global market and supplies batteries to BMW, Tesla and other major automakers.
Last year, SK On’s customer Ford Motors announced its plans to offer Chinese-made lithium iron batteries from CATL in its Ford F-150 Lightning electric truck next year. Tesla Inc. and EV startup Rivian also have announced their plans to use LFP batteries.
A Seoul-based research firm reported in August 2022 that SK On was the fifth-largest supplier of EV batteries in the world at a capacity of 13.2 gigawatt hours (GWh). The company’s annual battery sales hit $2.3 billion in 2021, up from $1.2 billion a year earlier and $530 million in 2019, when the company ranked as the ninth-largest battery maker.
