South Korea’s SK On plans to produce a new, lithium-iron-phosphate electric vehicle battery by 2025 as part of an effort to deliver lower-cost batteries to automakers squeezed by rising EV costs, a senior executive of the company said.
“We’re going to produce an LFP product by 2025,” Jason Lee, executive vice president and head of SK On’s battery marketing division, told Reuters on the sidelines of the CES conference. SK On is a subsidiary of the South Korean energy group SK Innovation.
Chinese battery makers dominate world LFP production, supported by strong demand from home-market automakers. LFP batteries can be produced at lower cost, but deliver less range than comparable nickel-cobalt EV batteries.
The cost advantage from lithium-iron chemistry depends on where the batteries are made, Lee said. LFP batteries made in China can have a 20% cost advantage over nickel cobalt batteries. LFP batteries produced in Europe can cost 15% less, he said.
“If you produce in the United States, there is no benefit,” he said.
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.
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.
