SK On is accelerating its energy storage system (ESS) business in North America. The company has inked a major supply agreement for ESS components with a Korean manufacturer that has set up production facilities in the U.S., kickstarting its local supply chain initiative.

Industry sources reported on Thursday that SK On has sealed a deal with Seojin Global, a subsidiary of Seojin Systems, to source ESS components as part of its U.S. market expansion strategy.

Under this agreement, Seojin is set to provide SK On with crucial ESS components valued at approximately 1.46 billion through 2036. SK On plans to integrate Seojin's battery racks and DC blocks (20-foot containers) with its U.S.-produced lithium iron phosphate (LFP) batteries for ESS applications.

Seojin is expected to add a dedicated SK On production line to its existing ESS facility in Texas. For SK On, this long-term partnership with a U.S.-based parts supplier represents a significant step towards establishing a robust local supply chain.

Analysts view this deal as particularly valuable, as it helps mitigate risks associated with tariffs and policies aimed at reducing dependence on China - issues that have been at the forefront since the Trump administration.

SK On made its official debut in the North American ESS market last September, signing a 1 gigawatt-hour (GWh) ESS supply contract with Flatiron, a Colorado-based renewable energy developer. The company also secured priority negotiation rights for Flatiron's additional ESS projects, totaling up to 6.2 GWh, planned in the U.S. by 2030, suggesting potential for increased future supply volumes.

During a recent earnings call, SK On disclosed ongoing discussions with multiple U.S. clients for ESS supply contracts totaling up to 10 GWh. The company aims to secure ESS orders of up to 20 GWh this year.

Industry experts anticipate that SK On will continue to expand its ESS business, particularly in the North American market, as the company has previously indicated. Last year, SK ramped up efforts to secure ESS materials by signing an MOU with L&F, a Korean cathode material manufacturer, to supply cathode materials for North American LFP batteries.

SK On is gearing up to commence mass production of LFP batteries for ESS in the U.S. in the latter half of 2026. This strategic move targets the growing U.S. ESS market, driven by increasing demand for AI data center power and renewable energy, amid a temporary lull in electric vehicle demand.

An SK On spokesperson said the collaboration with Seojin was based on a comprehensive evaluation of the company’s mid- to long-term business plans and potential future orders. The spokesperson added that SK On was focusing on expanding its ESS business in the North American market and was in talks with several clients about ESS orders.

SK On is accelerating its energy storage system (ESS) business in North America. The compa …

SK On Locks In a $1.46B U.S. ESS Supply Chain Deal Through 2036: The Tariff-Proof Playbook