Samsung SDI has secured a major deal to supply Tesla with over 3 trillion won ($2.11 billion) in Energy Storage System (ESS) batteries, spanning approximately three years. This agreement bolsters Samsung SDI’s position in the ESS market amid challenges in its battery segment.
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The deal with Tesla marks a significant expansion for Samsung SDI’s ESS battery supply, focusing on high-demand energy solutions.
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Samsung SDI also partnered with NextEra for a $310 million ESS supply contract from April 2024 to November 2025.
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Despite a 4% quarterly revenue drop to KRW 3.05 trillion in Q3, Samsung SDI reported a net profit of KRW 5.7 billion, driven by strategic business adjustments including over 110 GWh in new contracts.
Discover how Samsung SDI’s $2.11 billion Tesla battery deal strengthens its ESS leadership amid revenue challenges. Explore new products and U.S. expansion for future growth—stay informed on battery innovations driving the EV and energy sectors.
What is the Samsung SDI Tesla Battery Supply Agreement?
The Samsung SDI Tesla battery supply agreement involves Samsung SDI providing more than 3 trillion won ($2.11 billion) worth of Energy Storage System (ESS) batteries to Tesla over approximately three years. This partnership underscores Samsung SDI’s growing role in supporting electric vehicle manufacturers with advanced energy solutions. The deal aligns with Tesla’s expansion in sustainable energy storage, enhancing supply chain reliability for both companies.
How Does Samsung SDI’s Partnership with NextEra Fit into This?
Samsung SDI’s collaboration with U.S.-based NextEra Energy Resources complements the Tesla agreement by supplying ESS batteries valued at around $310 million from April 15, 2024, to November 20, 2025. This deal targets utility-scale energy projects, diversifying Samsung SDI’s portfolio beyond automotive applications. According to Samsung SDI’s announcements, these partnerships are crucial for scaling production and meeting rising demand in renewable energy storage. The company has highlighted the strategic importance of such contracts in stabilizing revenue streams, with ESS shipments expected to contribute significantly to overall growth. Industry analysts note that NextEra’s focus on large-scale solar and wind integration amplifies the impact, as ESS batteries enable efficient grid management and peak shaving.
Frequently Asked Questions
What Challenges Did Samsung SDI Face in Q3 Revenue?
Samsung SDI reported a 4% drop in quarterly revenue to KRW 3.05 trillion ($2.13 billion) for the third quarter ended September 30, alongside an operating loss of KRW 591.3 billion. This decline, marking a 22.5% year-over-year drop, stemmed from reduced EV battery sales and U.S. trade policy impacts on ESS. However, the company achieved a net profit of KRW 5.7 billion through gains from discontinuing its polarized film business.
How Is Samsung SDI Expanding in the U.S. ESS Market?
Samsung SDI is bolstering its U.S. presence by establishing manufacturing at the StarPlus Energy factory in Indiana, where it began local production of NCA batteries for ESS last month. Plans include installing LFP battery lines with mass production starting in Q4 2026, aiming for an annual capacity of 30 GWh. This move responds to growing demand in the American energy storage sector, supporting local supply chains and reducing import dependencies.
Key Takeaways
- Strategic ESS Deals Drive Recovery: The Tesla agreement worth over $2.11 billion and NextEra partnership highlight Samsung SDI’s focus on ESS to offset EV market slowdowns, securing over 110 GWh in new contracts.
- Innovation in Battery Technology: New products like the Samsung Battery Box 1.7 and 2.0, unveiled at RE+ in Las Vegas, feature enhanced energy density, safety via EDI technology, and AI-based maintenance for reliable performance.
- U.S. Expansion for Growth: By ramping up local production of NCA and LFP batteries, Samsung SDI positions itself for Q4 earnings surge, targeting European EV and U.S. ESS markets with improved efficiency.
Conclusion
The Samsung SDI Tesla battery supply agreement represents a pivotal step in fortifying the company’s ESS capabilities, even as it navigates quarterly revenue dips and operational losses in its battery division. With additional partnerships like the one with NextEra and innovations in products such as the Samsung Battery Box series, Samsung SDI is well-poised to capitalize on expanding markets in electric vehicles and renewable energy storage. As the firm advances U.S. manufacturing and secures substantial contracts, stakeholders can anticipate stronger performance in the coming quarters, underscoring the resilience of the global battery industry.
South Korea’s Samsung SDI recently finalized a landmark agreement to deliver Energy Storage System (ESS) batteries valued at more than 3 trillion won ($2.11 billion) to electric vehicle leader Tesla. This multi-year contract, projected to span about three years, reinforces Samsung SDI’s commitment to powering sustainable energy initiatives worldwide.
In a related development, Samsung SDI disclosed in March its collaboration with U.S. energy giant NextEra Energy Resources. This partnership entails supplying ESS components worth approximately $310 million, effective from April 15, 2024, through November 20, 2025. Such alliances are vital for Samsung SDI as it diversifies its client base in the burgeoning renewable sector.
These advancements occur against a backdrop of financial hurdles for the company. For the third quarter ending September 30, Samsung SDI announced a 4% decline in revenue to KRW 3.05 trillion ($2.13 billion), coupled with an operating loss of KRW 591.3 billion. Year-over-year, revenue fell by 22.5%, reflecting broader industry pressures in the battery market.
Nevertheless, Samsung SDI posted a modest net profit of KRW 5.7 billion for the period, largely attributable to proceeds from exiting its polarized film operations. This financial maneuver provided a buffer amid sector-wide challenges.
Breaking down the segments, the battery division recorded KRW 2.82 trillion in revenue—a 4.8% decrease quarter-on-quarter and 23.2% drop annually. The operating loss in this unit reached KRW 630.1 billion, exacerbated by waning demand for EV batteries and adverse effects from U.S. trade regulations on ESS products.
In contrast, the electronic materials segment showed resilience, with revenue climbing 6.2% quarter-on-quarter to KRW 231.8 billion, despite a 12.1% year-over-year decline. Operating profit in this area improved by 17.6% to KRW 38.8 billion, signaling pockets of strength within the organization.
Samsung SDI emphasized progress in its core battery operations during Q3, including the signing of multiple supply pacts totaling over 110 gigawatt-hours (GWh) with international automotive firms. These deals encompass both 46-series cylindrical and prismatic battery types, catering to diverse EV needs. Additionally, the company dominated bids in a major government-backed ESS project, further solidifying its market foothold.
Looking ahead, Samsung SDI anticipates a robust recovery in the fourth quarter, fueled by revitalization in Europe’s EV landscape and heightened ESS adoption in the United States. The company plans to channel resources into the ESS arena, amplify its EV market penetration, and enhance operational streamlined processes for sustained profitability.
To capitalize on U.S. opportunities, Samsung SDI is investing in domestic infrastructure. Last month, it launched production of nickel-cobalt-aluminum (NCA) batteries for ESS at its StarPlus Energy facility in Indiana—a joint venture underscoring long-term commitment to North American manufacturing.
Further, the firm outlined intentions to introduce lithium iron phosphate (LFP) battery production lines, with full-scale output slated for the fourth quarter of 2026. Projections indicate Samsung SDI’s U.S.-based ESS capacity will hit 30 GWh annually, positioning it as a key player in regional energy transitions.
Complementing these efforts, Samsung SDI showcased cutting-edge ESS innovations at the RE+ trade show in Las Vegas. The spotlight fell on the Samsung Battery Box (SBB) 1.7 and SBB 2.0 models, both set for U.S. production commencement next year.
The SBB 1.7 incorporates high-nickel NCA cells, delivering 6.14 MWh of capacity and boasting 17% greater energy density compared to its predecessor, the SBB 1.5. This upgrade enhances efficiency for large-scale applications.
Meanwhile, the SBB 2.0 leverages LFP cells in a proprietary prismatic design, incorporating advanced materials and electrode technologies. These innovations address LFP’s traditional limitations in energy density while preserving benefits like superior safety and cost-effectiveness.
Both models integrate Enhanced Direct Injection (EDI) technology, which elevates safety and dependability—critical for partners like Tesla in high-stakes energy deployments. Moreover, Samsung SDI has embedded AI-driven predictive maintenance and durability forecasting algorithms, enabling proactive management and extended lifespan.
This suite of developments illustrates Samsung SDI’s proactive strategy in navigating market volatilities. By forging ties with industry titans like Tesla and NextEra, and innovating on product fronts, the company is laying groundwork for accelerated growth. Experts from the battery sector, as cited in industry reports, praise these moves for aligning with global pushes toward electrification and grid stability.
In the broader context, Samsung SDI’s trajectory reflects the evolving dynamics of the energy storage industry. As EV adoption accelerates and renewable integration intensifies, reliable ESS solutions become indispensable. The company’s Q3 resilience, despite losses, and forward-looking investments signal confidence in overcoming hurdles through diversification and technological edge.
Stakeholders in the automotive and energy fields will watch closely as Samsung SDI executes on these agreements and expansions. The Tesla deal, in particular, could catalyze further collaborations, enhancing supply chain robustness amid geopolitical and economic shifts.
