Korean company EcoPro's lithium hydroxide has been acquired by SK On for use in their operations.
In a significant move for the global battery market, EcoPro Innovation and SK On have agreed to a lithium hydroxide supply contract. Under the terms of the agreement, EcoPro will provide up to 6,000 metric tons of battery-grade lithium hydroxide to SK On by the end of 2025 [1][2][3]. This amount is sufficient to support the production of batteries for approximately 100,000 electric vehicles.
The lithium hydroxide will be produced at EcoPro’s facilities in South Korea, processed domestically in cathode plants, and then shipped to SK On’s battery manufacturing plants in the United States. This supply chain strengthening is in line with the US Inflation Reduction Act (IRA), which encourages the use of domestically sourced or allied country materials to qualify for tax credits and production incentives [1][2][3][4].
For SK On, this agreement is strategically important as it allows them to comply with the IRA’s requirements and secure U.S. tax credits, thereby improving cost efficiency when manufacturing EV batteries in the U.S. This move away from reliance on Chinese suppliers also mitigates geopolitical risks and enhances supply chain resilience [1][2][3][4].
The lithium hydroxide supplied by EcoPro meets battery-grade specifications (≥56.5% LiOH content) and is intended for use in high-nickel nickel-cobalt-manganese (NCM) cathode batteries, which SK On produces in its U.S. plants. Both companies are reportedly in discussions about extending this partnership beyond 2025 into a multi-year agreement spanning 2026-2028, reflecting their intention to solidify this strategic supply relationship amid growing EV market demand and evolving trade policies [1][2][3].
This deal marks a significant step for EcoPro Innovation as well, as they aim to expand their customer base in the global battery market. The company already supplies other South Korean cell manufacturers, and this agreement with SK On further solidifies their position in the industry [1][2][3].
In summary, the deal enables SK On to obtain domestically processed lithium hydroxide by the end of 2025, comply with U.S. IRA requirements for battery material sourcing, qualify for U.S. tax credits and reduce tariff exposure, support production of around 100,000 EV batteries, diversify supply away from China, and build a more resilient North American supply chain [1][2][3][4].
[1] BusinessWire. (2025, July). SK On and EcoPro Innovation Announce Strategic Lithium Hydroxide Supply Agreement. [online] Available at: https://www.businesswire.com/news/home/20250715005370/en/SK-On-and-EcoPro-Innovation-Announce-Strategic-Lithium-Hydroxide-Supply-Agreement
[2] Reuters. (2025, July). SK On signs deal with EcoPro for lithium hydroxide supply. [online] Available at: https://www.reuters.com/business/autos-transportation/sk-on-signs-deal-ecopro-lithium-hydroxide-supply-2025-07-15/
[3] Green Car Congress. (2025, July). SK On and EcoPro Innovation Sign Lithium Hydroxide Supply Agreement. [online] Available at: https://www.greencarcongress.com/2025/07/20250715-skon-ecopro.html
[4] PV Magazine. (2025, July). SK On signs lithium hydroxide supply deal with EcoPro Innovation. [online] Available at: https://www.pv-magazine.com/2025/07/15/sk-on-signs-lithium-hydroxide-supply-deal-with-ecopro-innovation/
- The strategic partnership between EcoPro Innovation and SK On, involving the supply of lithium hydroxide for EV battery production, is a testament to the intersection of business, finance, and technology, as it aims to improve cost efficiency and foster strategic growth in the global battery market.
- In line with the US Inflation Reduction Act, this deal strengthens the technology-driven supply chain by ensuring the domestic processing of lithium hydroxide, ultimately benefiting SK On's business operations and financial standing in the EV market in North America.
