SK On Captures Over 50% of ESS Market!
Shocking fact: 80% of ESS fires originate from overseas batteries. SK On’s securing over 50% share of the KRW 1 trillion 2nd ESS central contract market isn’t just luck. It’s the result of superior technology in domestically produced LFP batteries using local materials.
Deep Dive into SK On’s ESS Technology
SK On’s LFP batteries, primarily composed of lithium, iron, and phosphate, are characterized by high thermal stability and long lifespan. The self-developed BMS (Battery Management System) monitors battery voltage, current, and temperature in real-time to prevent overcharging, over-discharging, and overheating. SK On also provides optimal battery capacity and system configurations considering the ESS’s installation environment and operating conditions.
Market Impact Analysis
- Accelerated Growth of the Korean ESS Market: SK On’s success will further accelerate the growth rate of the domestic ESS market. The ESS market size is estimated at approximately KRW 5 trillion in 2023 and is expected to grow to over KRW 7 trillion in 2024. (Source: SNE Research)
- Increased Localization Rate of Battery Materials: SK On’s use of domestic materials will strengthen the competitiveness of the Korean battery material industry and reduce import dependence. The current localization rate of battery materials is about 60%, but it is expected to increase to over 70% due to SK On’s efforts.
- Expanded Market Share of LFP Batteries: SK On’s LFP battery technology will change the market structure centered on NCM batteries. LFP batteries are highly competitive in price and safe, increasing demand in various fields such as ESS and electric vehicles. The LFP battery market share was about 30% in 2023 but is expected to expand to over 40% in 2024. (Source: BloombergNEF)
Competitive Landscape
LG Energy Solution is targeting the high-performance ESS market based on its NCM battery technology. Samsung SDI is developing various safety devices to enhance ESS safety. SK On is expanding its market share by leveraging the price competitiveness and safety of LFP batteries, and in particular, strengthening quality control and customer responsiveness through domestic production.
3 Steps You Should Take Now
- Consider ESS Adoption: Actively consider ESS adoption to reduce energy costs and ensure stable power supply.
- Inquire about SK On Solutions: Inquire about SK On’s ESS solutions and receive customized consulting.
- Utilize Government Support Policies: Actively utilize government support policies for ESS installation to reduce initial investment costs.
One-Year Outlook
Within the next year, SK On is expected to improve the energy density of LFP batteries for ESS by more than 15% and develop next-generation BMS technology to further enhance ESS safety. In addition, they will accelerate their entry into the North American market to expand their presence in the global ESS market.
