South Korea’s SK On is set to commence mass production of lithium iron phosphate (LFP) batteries by 2026, targeting major traditional automakers seeking cost-effective battery solutions. SK On’s Chief Administrative Officer, Choi Young-chan, revealed the company’s plans at the CES technology show in Las Vegas, emphasizing ongoing discussions with original equipment manufacturers (OEMs). While specific automakers were not disclosed, Choi mentioned that production could begin in 2026 or 2027 if successful dialogues continue.
As automakers strive to reduce electric vehicle (EV) costs and minimize supply chain concerns, various batteries, including LFP, are gaining traction. SK On’s South Korean competitors, LG Energy Solution and Samsung SDI have also announced plans for mass production of LFP batteries in 2026.
SK On, a battery unit of South Korean energy group SK Innovation, currently supplies EV batteries to Ford, Volkswagen, and Hyundai. The company is exploring the possibility of manufacturing LFP batteries in Europe or China, with a focus on energy density, charging time, and efficiency rather than competing solely on price against dominant Chinese LFP manufacturers. Choi acknowledged the challenge of competing with Chinese LFPs in terms of cost but emphasized SK On’s focus on unique selling points, such as energy density and charging efficiency.
While the firm has production sites in the United States, South Korea, Hungary, and China, it is not engaging in LFP supply talks with its U.S. automaker customers due to high production costs in the United States. Instead, SK On is concentrating on the European market.
Chinese battery manufacturers, particularly CATL and BYD, dominate global LFP production, benefiting from strong demand in the Chinese EV market. LFP batteries from Chinese makers are approximately 20% cheaper than nickel-based counterparts, making them attractive to automakers seeking cost-effective solutions.
While pushing for LFP battery production, SK On continues to develop EV batteries. The company has made progress in developing cylindrical batteries used by Tesla and other automakers. The strategic move into LFP batteries aligns with the industry trend toward diverse battery chemistries to meet varying performance and cost requirements in the evolving electric vehicle landscape. SK On’s entry into mass production of lithium iron phosphate (LFP) batteries reflects a strategic shift in response to the automotive industry’s demand for cost-effective and diverse battery solutions. As automakers seek affordable electric vehicle options and reduced dependency on specific materials, SK On positions itself to cater to evolving market needs.