Samsung SDI Shares Soar 8% on Reported $2.1 Billion Tesla Energy Storage Battery Deal

SEOUL – Tesla is reportedly nearing a significant three-year agreement with South Korea's Samsung SDI to procure approximately $2.11 billion (3 trillion won) worth of energy storage system (ESS) batteries. This development, initially reported by the Korea Economic Daily and subsequently picked up by Reuters, saw Samsung SDI's shares surge over 8% on the news. The deal underscores Tesla's strategic efforts to diversify its supply chain for its growing energy business.

The reported agreement would involve Samsung SDI supplying ESS batteries to Tesla over a three-year period. While the Korea Economic Daily cited an unnamed battery industry source, a Samsung SDI spokesperson confirmed that discussions are underway but stated, "nothing has been decided yet" regarding the finalization of the deal. Tesla has not yet issued an official comment on the matter.

This potential partnership aligns with Tesla's broader strategy to reduce its reliance on Chinese suppliers for key components, particularly in its energy storage division, amidst ongoing tariffs and geopolitical tensions. Tesla executives noted in a recent earnings call that its energy storage business faces headwinds from increased competition and tariffs, with current sales primarily sourced from China. The company is actively seeking alternative suppliers.

For Samsung SDI, the deal represents a strategic pivot and a significant boost. The company recently indicated plans to repurpose some of its electric vehicle battery production lines in the U.S. state of Indiana to manufacture ESS batteries, citing a notable decline in automotive battery demand from joint venture partner Stellantis. This move reflects a broader trend among South Korean battery makers to adapt to evolving market demands by converting EV battery production for energy storage systems.

The reported agreement with Samsung SDI follows a similar deal Tesla secured with another South Korean firm, LG Energy Solution, for lithium-iron-phosphate (LFP) batteries for its energy storage products. These partnerships are crucial as Tesla aims to strengthen its position in the rapidly expanding global market for stationary energy storage solutions.