South Korea's SK On and US-based Factorial Energy signed a memorandum of understanding on July 29 to find out whether solid-state batteries can be built on assembly lines that already make lithium-ion cells. The two companies will spend the coming months studying how Factorial's FEST cell technology fits into SK On's global manufacturing network, which produces more than 200 GWh of batteries a year.
Two Battery Makers, One Manufacturing Question
The deal pairs a Boston-area startup with a production heavyweight. Factorial has spent years proving its solid-state chemistry in labs, test vehicles, and investor decks. SK On supplies Hyundai, Ford, Volkswagen, and Ferrari from plants across the United States, Europe, and Asia. One side has the cell. The other side has the factories.
The MOU itself is non-binding apart from a few customary clauses. The real work — evaluating cell design, tooling, quality control, and production economics — happens over the next several quarters, and both sides expect to sign binding agreements later.
The arrangement fits Factorial's capital-light strategy. Instead of raising billions of dollars to build its own gigafactories, the company wants its cells to run through plants that are already operating. Factorial's CEO, Siyu Huang, framed the logic in one line when the deal was announced: a battery breakthrough only matters if it can be manufactured at scale.
Huang spelled out why SK On in particular made sense as a partner. The Korean producer's manufacturing footprint spans some of the world's most advanced battery facilities, she said, and its expertise will be critical in shaping how solid-state technology integrates into global production. For a startup whose entire thesis rests on borrowing capacity rather than building it, that sort of endorsement carries real weight.
What Factorial Brings: The FEST Cell
Factorial's FEST cells are the payload of this partnership. Stellantis tested the 77 Ah cells last year and reported an energy density of 375 Wh/kg over more than 600 cycles. The cells charged from 15% to 90% in 18 minutes and kept performing across temperatures from -30°C to 45°C, with discharge rates of up to 4C.
Those numbers translate into driving range. Mercedes-Benz drove a lightly modified EQS more than 1,200 km (745 miles) on a single charge using Factorial cells last fall. In June, Factorial started testing the cells in North America through its collaboration with Stellantis, powering a Dodge Charger Daytona prototype built on the STLA Large platform.
Mercedes-Benz, Stellantis, Hyundai, and Kia all appear on Factorial's investor list, alongside IQT, the not-for-profit investor tied to the US national security community. The company listed on the Nasdaq under the ticker FAC and positions its solid-state platforms for aerospace, data centers, and defense as much as for passenger cars. Factorial calls its second platform Solstice, and both FEST and Solstice are engineered with scalable manufacturing in mind from the start.
The aerospace and data-center angle is worth pausing on. High energy density at low weight matters for aircraft and satellites, where every kilogram of battery costs fuel or payload. Hyperscale data centers, meanwhile, are hunting for storage that can charge and discharge quickly without catching fire. Factorial's stated ambition is to serve land, air, and orbit, and the SK On link gives it a manufacturing route into all three rather than just the automotive market.
What SK On Brings: Factories That Already Exist
SK On is the manufacturing half of the equation. The company runs more than 200 GWh of annual production capacity worldwide, including roughly 100 GWh in the United States. Its Commerce, Georgia, complex accounts for 22 GWh of that US capacity, with additional operations in Tennessee.
Those plants were built around lithium-ion processes: electrode coating, cell assembly, formation, and aging lines tuned to liquid electrolytes. Solid-state cells replace the liquid electrolyte with a solid one, which changes coating, stacking, and pressure requirements. Whether SK On's existing tooling can handle the switch, or needs retrofits, is the core question the two companies will answer together.
Ki-soo Park, who heads SK On's Institute of Future Technology, said the collaboration gives both sides a chance to evaluate the technical feasibility and manufacturing readiness of solid-state batteries. He added that SK On will keep exploring next-generation battery partnerships beyond this one.
SK On itself has a short corporate history for a company its size. It launched as an independent business in October 2021, after SK Innovation split off its battery unit. Since then it has built a global footprint and a customer list that now includes Ferrari, a sign of how far the Korean producer has pushed into premium supply deals. The company frames its pitch around production and quality-management know-how accumulated over decades inside SK Innovation, Korea's largest energy firm.
The US angle matters for both companies. SK On's American plants are already tied into domestic content requirements that automakers need to hit for federal EV incentives. If solid-state cells can be made in Georgia or Tennessee, they inherit that same supply-chain advantage — a detail that Factorial, with its US national-security backing, is unlikely to overlook.
Why Scale Is the Hard Part
The battery industry has no shortage of solid-state announcements. Most of them stall in the gap between a working prototype and a product that can be built by the million.
Solid electrolytes that conduct ions well tend to crack under the pressure and temperature swings of real-world use. Manufacturing them adds process steps and cost that liquid-electrolyte lines never faced. Holding high energy density while keeping yields up is an engineering problem no company has fully solved at gigawatt scale, which is exactly why partnerships like this one matter: they attach the chemistry to a supply chain that already knows how to move electrodes, cans, and modules in bulk.
Factorial's answer is to design cells that reuse as much of today's infrastructure as possible. Its materials partnership with South Korea's POSCO FUTURE M, announced in December, covers the supply side of the equation. The SK On deal covers the factory side. Together they form a Korean-centric support network around an American cell design.
The competitive field is crowded. Toyota has shown solid-state prototypes for years, QuantumScape has shipped early cells to automaker partners, and Chinese players including CATL and BYD are pushing their own next-generation chemistries. China moved to standardize solid-state testing in 2026, and automakers like Dongfeng have begun cold-weather trials of solid-state packs. Whoever reaches volume production first gets to set the manufacturing playbook everyone else copies.
What Happens Next
Neither company is promising a production date. The MOU sets up feasibility studies, not a factory line, and the terms of any real collaboration will land in later binding agreements.
For automakers, the stakes are easy to summarize. Solid-state cells promise roughly double the energy density of today's packs, which means longer range, lighter vehicles, and faster charging — the three things customers actually notice. If SK On's factories prove the cells can be made at scale, solid-state stops being a lab talking point and becomes a supply-chain decision.
For Factorial, the deal is validation that its route to market runs through other companies' plants. Huang said SK On's manufacturing footprint spans some of the world's most advanced battery facilities, and that SK On's expertise will shape how solid-state technology reaches global production.
For SK On, the calculus is about hedging a lithium-ion empire. The company's existing plants will keep printing cells for years, but the next decade belongs to whoever owns the follow-up chemistry. A seat at the table with Factorial — one of the few solid-state developers with real automaker test data — is a cheap way to buy into that future without betting the balance sheet on an unproven process.
The next solid-state milestone will be a number, not a slogan: how many cells per minute a retrofitted line can turn out, and at what cost per kilowatt-hour. Both companies now have a reason to find out together.