Samsung SDI Shares Soar on Potential Tesla Deal

On Tuesday, South Korea’s Samsung SDI announced a collaboration with Tesla worth $2.11 billion to supply energy storage batteries, according to Korean media. The deal saw a surge of over 8% in the news coverage.

This initiative by Tesla aims to reduce its reliance on China for major parts, thereby mitigating the impact of tariffs and geopolitical tensions. Recently, Tesla has signed several deals with South Korean companies, including Samsung Electronics and LG Energy Solution, to source chips and batteries in recent months, in an effort to join the venture.

Energy storage batteries have the same potential and chemistry as automotive batteries and are used to power facilities such as data centres. South Korean battery makers are using the same methodology to produce the energy storage systems, after being eliminated by the US subsidies.

In October, Samsung SDI stated that it had seen a major fall in the demand for automotive batteries from its joint venture partner, Stellantis, and will propagate some of its production lines in the US state of Indiana to produce energy storage batteries.

The annual supply of energy storage batteries would be 10 GWh, according to a source, as reported by Reuters, following discussions with Tesla and Samsung SDI.

South Korean Newspaper Korea Economic Daily and various sources reported it as a potential deal, stating that this supply deal would be valued at more than 3 trillion won; however, Tesla and SDI spokespersons have not made any clear statement yet.

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Tesla stated during an October earnings conference call that all current sales are from China while they continue exploring other alternatives, citing tariffs and increased competition.