Samsung and Tesla Forge Major Battery Supply Deal for US-Made Energy Storage

Samsung SDI is negotiating a massive battery supply agreement with Tesla. The deal could be worth around $2.11 billion. This partnership would significantly boost Tesla’s US-based energy storage production.

The agreement involves Samsung SDI supplying 10 gigawatt-hours of LFP batteries. These batteries are intended for Tesla’s energy storage systems. According to Reuters, the deal would unfold over three years.

Strategic Shift to US Manufacturing for Key Components

Samsung SDI plans to manufacture these batteries at its Indiana facility. This factory was originally established through a joint venture with Stellantis. The move represents a strategic pivot for Samsung’s battery division.

Demand for automotive batteries from Stellantis has recently declined. This was confirmed in Samsung’s recent earnings call. Repurposing the Indiana plant for Tesla’s ESS batteries is a logical step.

Reducing Reliance and Strengthening Supply Chains

This deal is strategically crucial for Tesla. It helps reduce the company’s reliance on battery suppliers from China. Securing a stable, US-made supply of LFP batteries is a key objective.

The batteries are expected to be used in Tesla’s Megapack product. Megapack is a utility-scale energy storage solution. This partnership strengthens both companies’ positions in the clean energy market.

The potential Samsung-Tesla battery deal marks a significant step in localizing advanced energy supply chains in the United States. This collaboration underscores a major shift toward securing domestic production for critical clean energy technologies.

Thought you’d like to know

What is the reported value of the Samsung-Tesla battery deal?

The deal is reportedly worth approximately $2.11 billion. It involves a supply of 10 gigawatt-hours of batteries. The agreement would span three years.

What type of batteries will Samsung supply to Tesla?

Samsung SDI will supply lithium iron phosphate (LFP) batteries. This chemistry is known for its stability and long life cycle. LFP batteries are increasingly popular for energy storage systems.

Where will the batteries for this deal be manufactured?

The batteries are planned to be produced at Samsung SDI’s factory in Indiana. This facility was built as part of a joint venture with Stellantis. Utilizing this plant helps optimize existing manufacturing capacity.

How will this deal impact Tesla’s operations?

The agreement would bolster Tesla’s supply of batteries for its energy storage division. It specifically supports the production of its large-scale Megapack units. It also diversifies Tesla’s battery sourcing away from China.

Is the Samsung and Tesla battery deal finalized?

No, the deal has not been officially finalized. Reports from sources like The Korea Economic Daily indicate that negotiations are ongoing. Samsung SDI has confirmed the talks but not the final terms.