Type to search

South Korea’s SK On to Produce Cheaper EV Battery by 2025

The battery-maker aims to produce LFP batteries that can be made at lower cost, but deliver less range than comparable nickel-cobalt electric vehicle batteries

The logo of SK Innovation is seen in front of its headquarters in Seoul, South Korea
SK On plans to source its LFP batteries initially from China. Photo: Reuters


South Korean battery manufacturer SK On is planning to produce a new, lithium-iron-phosphate (LFP) electric vehicle (EV) battery by 2025, a senior executive of the company said on Thursday.

The move is part of the company’s effort to deliver lower-cost batteries to automakers as rising EV costs squeeze demand. LFP batteries can be produced at lower cost, but deliver less range than comparable nickel-cobalt EV batteries.

“We’re going to produce an LFP product by 2025,” Jason Lee, executive vice president and head of SK On’s battery marketing division, said on the sidelines of the CES conference in Las Vegas. SK On is a subsidiary of South Korean energy group SK Innovation.


Also on AF: Tesla Reduces EV Prices in China for Second Time in 3 Months


SK On customer Ford said last year it plans to offer Chinese-made lithium iron batteries from CATL in its Ford F-150 Lightning electric truck next year. Tesla and EV startup Rivian also have announced plans to use LFP batteries.

The cost advantage from lithium-iron chemistry depends on where the batteries are made, Lee said.

LFP batteries made in China can cost 20% lower than nickel cobalt batteries, while those produced in Europe can cost 15% less, he said.

Chinese battery makers dominate world LFP production, supported by strong demand from home-market automakers.

SK On plans to source its LFP batteries initially from China, Lee said.

“If you produce in the United States, there is no benefit,” he said.


Meeting US EV subsidy requirements

SK On is investing in new US battery plants and by 2026 expects to have 150 gigawatt-hours of capacity.

Lee said those investments, as well as investments in US production of cathodes should allow SK On’s US customers to meet domestic content requirements attached to US EV subsidies.

Battery makers and automakers are expanding EV battery capacity globally, and some industry analysts have questioned whether that could result in oversupply. Lee said he does not expect oversupply in the near future. SK On’s new factories have been built with guarantees from automakers that they will take the batteries, he said.

Raising the capital required to fund investments in capacity and new chemistries is one of SK On’s main challenges, Lee said.

“We are thinking about raising more capital,” Lee said.


  • Reuters, with additional editing by Vishakha Saxena



Also read:

US, Europe Chase Cheaper EV Battery to Curb China Dominance

SK Battery Firms Warn of Supply Chain Damage From US EV Rules

Asian EV Battery Makers Seen Dominating Sector in Europe

Sony, Honda Reveal Prototype of ‘Intelligent’ Afeela EV



Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]


AF China Bond