Tesla is making headlines once more, this time for a potential major partnership with South Korea’s Samsung SDI. According to The Korea Economic Daily, Samsung SDI has tentatively agreed to supply Tesla with Energy Storage System (ESS) batteries worth more than 3 trillion won ($2.11 billion) over the next three years. Although neither company has confirmed the story, the agreement suggests a strong relationship in the energy storage market.
Energy storage solutions are becoming increasingly important as the demand for renewable energy and AI infrastructure continues to grow. Tesla’s Megapacks, massive batteries that store renewable energy, have previously proven effective in industrial and grid-scale applications. The inclusion of Samsung SDI as a supplier may boost Tesla’s production capability and worldwide reach.
What Are ESS Batteries and Why They Matter
Energy Storage System (ESS) batteries are large-scale batteries designed to store electricity for later use. Unlike regular batteries in your phone or electric car, ESS units power entire buildings, factories, or even cities. They store excess energy produced by renewable sources — like solar and wind — and release it when demand spikes or when generation drops.
This makes them essential for maintaining a stable power supply, especially as the world shifts to clean energy. ESS batteries also help reduce energy waste, prevent blackouts, and make renewable energy more reliable. For companies like Tesla, they’re not just backup power — they’re the backbone of a smarter, greener energy grid.
ESS Batteries to Be Built in Indiana
Reports indicate that Samsung SDI will produce the ESS batteries at its Indiana factory, a joint venture with Stellantis that is still under construction. Interestingly, the company plans to use a portion of its EV battery lines at the plant to produce ESS cells, with a target capacity of 30 GWh by the end of next year.
The Indiana facility will give both companies a strategic advantage — production in the U.S. means fewer tariff complications and faster delivery to Tesla’s American projects. This also supports Tesla’s long-term goal of expanding energy storage deployment across North America.
Why Tesla Needs More ESS Batteries
The energy storage industry is developing, particularly in North America, where AI-driven businesses want more power stability. As huge data centers and electric grids require reliable backup solutions, ESS batteries have emerged as the preferred choice.
For Tesla, whose Megapack is already a top seller in the large-scale battery segment, more suppliers mean more flexibility and speed. By teaming up with Samsung SDI, Tesla can maintain steady production while meeting increasing demand from AI infrastructure, renewable energy facilities, and industrial clients.
The Tesla–Samsung Partnership Grows Stronger
Tesla’s relationship with Samsung isn’t new. Apart from this potential ESS battery deal, Samsung is already involved in producing Tesla’s AI5 and AI6 chips. These chips are designed to power the company’s next-generation projects, including the Optimus humanoid robot and the Cybercab autonomous service.
Elon Musk has called this partnership a “real collaboration,” even noting that he plans to “walk the line” at Samsung’s Taylor, Texas, foundry to personally oversee progress. The addition of ESS batteries to their collaboration shows how deeply intertwined the two tech giants have become in both hardware and energy innovation.
The Shift in Samsung’s Production Strategy
Samsung SDI’s shift to ESS manufacture also makes commercial sense. Stellantis, the company’s joint venture partner, recently reduced car battery demand. To adapt, it started adapting EV battery lines for ESS manufacturing.
During its October earnings call, Samsung SDI acknowledged this move, citing U.S. subsidy cuts and shifting global policies as forces pushing South Korean firms to diversify. Producing ESS batteries could help the corporation retain consistent revenue while entering a rapidly expanding market niche.
Competition and Market Impact
Tesla’s energy storage section has recently encountered hurdles. In an October results call, the business stated that competition and tariffs are reducing its profits, particularly since many of its current battery supplies are sourced from China. Expanding collaborations within the United States, like as the one with Samsung SDI, might help Tesla balance its supply chain and improve its market position.
Following the report, Samsung SDI’s shares surged up to 8.4% in early trading, though they later settled around a 4.7% increase. Investors appear confident that this potential deal could significantly boost Samsung’s growth and global visibility.
What’s Next for Tesla and Samsung?
While neither Tesla nor Samsung SDI has formally announced the partnership, all signals point to a promising relationship. Industry insiders told Reuters that the yearly supply volume might approach 10 GWh, indicating a significant commitment. If finalized, the partnership could play a major role in accelerating Tesla’s global energy business, making renewable power storage more efficient, accessible, and profitable. For Samsung SDI, this deal could strengthen its foothold in the U.S. and set a new standard in high-capacity battery production.
If finalized, the partnership could play a major role in accelerating Tesla’s global energy business — making renewable power storage more efficient, accessible, and profitable. For Samsung SDI, this deal could strengthen its foothold in the U.S. and set a new standard in high-capacity battery production.
