SK On, a major electric vehicle battery producer, signed a supply agreement with EcoPro Innovation, securing domestically produced lithium hydroxide for its U.S. battery manufacturing.
Under the deal, SK On will receive up to 6,000 metric tons of Korean-made lithium hydroxide by the end of this year, a volume sufficient to power about 100,000 electric vehicles. The material will be processed at local cathode plants in Korea before shipment to SK On’s U.S. battery facilities.
Lithium hydroxide is a fundamental component in nickel-cobalt-manganese (NCM) cathodes, which support high energy density in EV batteries.
Until now, SK On sourced most of its lithium hydroxide from overseas suppliers, particularly China. By securing a local supply, SK On aims to reduce geopolitical exposure, stabilize pricing and strengthen its competitiveness in North America.
An additional driver for the agreement is the U.S. Inflation Reduction Act (IRA). Korean-produced lithium hydroxide meets the Advanced Manufacturing Production Credit requirements under the IRA, enabling SK On to claim tax credits on qualifying battery components. These incentives are expected to improve the company’s cost efficiency and support its expansion in the U.S. market.
“This partnership marks our first lithium hydroxide supply to a global battery manufacturer,” said EcoPro Innovation CEO Kim Yoon-tae. “It will bolster our efforts to enter the North American and European markets.”
“We’re building a stable supply chain amid shifting global policies,” said Park Jong-jin, head of strategic purchasing at SK On. “Securing competitive materials and diversifying partners will boost our North American capabilities.”
The collaboration reflects growing industry trends toward localizing critical battery raw materials and demonstrates how regulatory frameworks like the IRA are reshaping supply chain strategies. It underscores SK On’s commitment to cost-effective manufacturing and EcoPro Innovation’s goal of scaling its international footprint.
Source: The Korea Herald
