TLDR
- Samsung SDI reportedly reached a $2.11 billion battery supply agreement with Tesla spanning three years
- The batteries will be used in Tesla’s Megapack and Powerwall energy storage systems, not vehicles
- Samsung SDI states no final decision has been made on the deal
- The contract would establish Samsung as Tesla’s second major battery supplier outside China
- Tesla’s energy storage business has experienced faster growth than its automotive division
Samsung SDI has reportedly closed a $2.11 billion battery supply deal with Tesla. The three-year agreement focuses on Energy Storage System batteries, according to Korea Economic Daily.
Industry sources told the publication that Samsung will supply batteries for Tesla’s grid-scale and residential storage products. These include Megapack units for utilities and Powerwall systems for homes.
Samsung SDI released a statement saying no final agreement exists yet. Tesla has not responded to media inquiries about the contract.
The reported deal would diversify Tesla’s battery supply chain. Right now, Chinese manufacturer CATL dominates Tesla’s battery purchases.
Adding Samsung SDI creates geographic diversification. Tesla gains a reliable Korean supplier for its expanding energy business.
Storage Business Outperforms Vehicle Sales
Tesla’s energy division has delivered record results in recent quarters. Internal data shows Megapack installations outpacing electric vehicle delivery growth.
CEO Elon Musk has repeatedly stated that energy storage could surpass automotive revenue. The numbers are starting to support that prediction.
Tesla deploys large-scale battery systems across three continents. Major installations operate in Australia, the United States, and the United Kingdom.
The company offers three product tiers. Powerwall targets residential customers, Powerpack serves businesses, and Megapack handles utility-scale projects.
Samsung SDI manufactures high-performance lithium-ion batteries. The company maintains strong safety ratings and produces high-density cells.
Their client list includes major automakers like BMW, Stellantis, and Rivian. Landing Tesla would represent their largest energy storage contract to date.
Why Battery Storage Markets Are Expanding
Renewable energy has always faced a storage challenge. Solar generation stops when the sun sets, wind turbines require steady wind.
Battery systems bridge these gaps. The International Energy Agency calculates that global storage capacity must grow 50-fold by 2040.
Tesla entered this market early and aggressively. The company has secured long-term supply contracts with governments in Australia, Japan, Ireland, and multiple U.S. states.
California alone ordered several gigawatt-hours of Tesla battery capacity. These orders span multiple years and guarantee steady revenue.
Samsung SDI would start deliveries in 2024 based on the Korean media report. The company is also developing solid-state battery technology for future products.
Tesla investors benefit from improved supply chain resilience. Multiple suppliers reduce production risks and price volatility.
Samsung SDI shareholders gain access to stable, growing revenue streams. Energy storage contracts provide more predictable income than automotive supply deals.
Manufacturing Scale-Up Plans
Tesla operates energy storage production facilities in two locations. The California Megafactory handles North American demand, while a Shanghai plant serves Asian markets.
The Samsung partnership would support capacity expansion at both sites. Tesla needs increased battery supplies to meet growing order volumes.
Grid-scale storage has become as lucrative as electric vehicles. Profit margins compete with automotive sales while facing less market competition.
Global renewable energy mandates continue accelerating. Every new solar farm and wind installation requires battery backup for grid stability.
The Korea Economic Daily valued the contract at 3 trillion won. Samsung SDI maintains that negotiations are ongoing but nothing is finalized yet.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
