SK Innovation is experiencing a strong early trading surge of over 6% following news of a large battery supply contract for energy storage systems (ESS) from its subsidiary, SK On.
As of 9:43 a.m. on the Korea Exchange, SK Innovation's shares were trading at 124,300 won, up 7,400 won (6.33%) from the previous trading day.
The increase in investor sentiment is attributed to SK On, the largest shareholder of SK Innovation, signing a long-term supply contract with a U.S. ESS company, accelerating its entry into the North American ESS market.
On August 27, SK On announced it had signed a battery cell supply contract with U.S. ESS manufacturer NeoVolta Power for a total of 9 gigawatt-hours (GWh). NeoVolta Power is a subsidiary of the American energy technology company NeoVolta, with production facilities located in Pendergrass, Georgia.
Industry estimates place the contract's value at approximately 1.5 trillion won. SK On will supply lithium iron phosphate (LFP) pouch battery cells to NeoVolta Power over five years, from next year until 2031. The batteries will be produced at SK On's facility in Georgia.
Considering SK On's global ESS order target of over 20 GWh for this year, this contract secures nearly half of that goal.
There is also potential for additional contracts. SK On plans to pursue a separate agreement to supply an additional 9 GWh of LFP battery cells for ESS to NeoVolta Power within the year.
* This article has been translated by AI.
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