Samsung SDI wins US ESS LFP battery deal amid talks with Tesla

Samsung SDI said Wednesday that its Michigan-based subsidiary signed a contract with a U.S. energy infrastructure developer to supply lithium iron phosphate (LFP) batteries for energy storage systems (ESS) over a three-year period starting in 2027.

The Korean battery maker did not disclose the buyer’s name or the exact size of the deal, though it said the contract is worth more than 2 trillion won ($1.36 billion).

The announcement has drawn attention as Samsung SDI is reportedly in talks with Tesla to sign a separate three-year agreement worth 3 trillion won to supply 10 gigawatt-hours of LFP batteries annually for ESS.

However, the Korean firm denied speculation that the buyer in the recent deal is the U.S. electric vehicle manufacturer.

"In addition to the latest contract, Samsung SDI is currently in discussions with multiple global customers regarding the supply of both LFP and NCA batteries, fueling expectations for additional contracts in the near future," the company said in a press release.

Samsung SDI plans to fulfill the contract by converting some production lines at its joint venture factory with Stellantis to produce LFP batteries instead of ternary batteries composed of nickel, cobalt and aluminum (NCA).

"This agreement marks a significant milestone for Samsung SDI, which has traditionally focused on NCA batteries," the company said. "By expanding its portfolio into LFP technology, the company is poised to strengthen its differentiated technological edge and further accelerate the global expansion of its prismatic batteries for ESS."

According to Samsung SDI, its prismatic LFP cells for ESS are packaged in a 20-foot container called the Samsung Battery Box 2.0, an all-in-one ESS solution that integrates multiple battery racks in a single container to enhance portability and simplify installation.

Compared with other ESS units using LFP cells, Samsung SDI said its prismatic LFP cells are more resistant to external shocks thanks to aluminum casings and safety design features such as vents and fuses. The company also highlighted its position as the only non-Chinese manufacturer of prismatic batteries operating in the U.S.