America’s Battery Makers Bet Big on Energy Storage

SK On redirects US output toward energy storage as policy and grid needs lift demand for locally made batteries

13 Sep 2025

US battery manufacturers are redirecting investment toward energy storage as growth in electric vehicle sales slows and demand from utilities and renewable developers accelerates, prompting changes in production strategy across the sector.

SK On, the South Korean battery maker, said it would channel part of its US manufacturing capacity into energy storage systems, marking a shift for a company whose expansion has been closely tied to the EV market. The move comes as sales of electric cars have levelled off, while demand for grid-scale storage has risen sharply.

The company has signed a multi-year agreement with Flatiron Energy under which SK On will supply up to 7.2 gigawatt hours of lithium iron phosphate batteries for utility-scale storage projects in the US. Production is scheduled to begin in 2026 at its plant in Georgia, where SK On plans to convert sections of existing EV battery lines to serve the storage market.

Analysts said the agreement reflected growing interest from utilities and renewable energy developers seeking lower-cost, reliable systems to support grid stability as solar and wind capacity expands. Lithium iron phosphate batteries, which are cheaper and longer-lasting than some alternatives, have become increasingly popular for stationary storage.

SK On said the decision did not signal a retreat from electric vehicles but rather a response to shifting demand. Company executives have pointed to longer-term forecasts showing energy storage emerging as a major driver of battery growth over the next decade.

Other battery makers are considering similar adjustments, as the storage market attracts new capital and long-term supply contracts. The trend is also reinforcing efforts to build a more domestically based supply chain, in line with US industrial policy that favours local production.

To support the shift, SK On has partnered with South Korea’s L&F to strengthen its supply of cathode materials in the US, aiming to reduce reliance on overseas inputs. Industry executives caution, however, that retooling existing plants can cause delays and that competition in the storage market is intensifying.

Even so, industry observers expect storage to remain one of the fastest-growing segments of the clean energy sector. As renewable generation expands and grid operators seek greater flexibility, battery makers that move early into storage are likely to play a central role in shaping the future of the US power system.