South Korea’s Samsung SDI has signed its inaugural US contract for lithium iron phosphate (LFP) cells, while China’s Trina Storage has expanded its partnership with Lightshift Energy. Both companies announced their agreements on December 10, 2023, marking significant advancements in the US battery energy storage market.
Samsung SDI’s Michigan-based subsidiary, Samsung SDI America, secured a contract to provide US-manufactured LFP cells for battery energy storage system (BESS) applications. The deal, worth over KRW2 trillion (approximately US$1.36 billion), spans three years beginning in 2027. These prismatic cells have reportedly been developed through extensive research and development efforts. The company plans to commence mass production by the end of 2025 and aims to achieve an annual production capacity of 30GWh for energy storage batteries in the US within the next year.
In early November, reports indicated that Samsung SDI was negotiating a multi-year, multi-gigawatt-hour BESS battery supply agreement with Tesla. Although this remains unconfirmed, speculation suggests Tesla could be the undisclosed customer for the recent contract. Nevertheless, the growing demand for stationary grid storage in the US indicates several potential candidates may be involved.
The announcement from Samsung SDI left some ambiguity, particularly regarding whether the contract includes full BESS solutions. Such a deal would not align with Tesla’s business model, as the company produces its own Megapack utility-scale BESS products using third-party cells. Samsung SDI has emphasized its commitment to its energy storage system (ESS) business, aiming to reposition itself within this evolving market.
Samsung SDI is adjusting its production capabilities to focus on ESS cells, allowing it to capitalize on the demand for domestic supply chains in the US. A consultant, who requested anonymity due to the political implications, recently noted that new regulations could restrict projects and manufacturing facilities from receiving tax credit incentives if they utilize Chinese-made products above a certain threshold. This change could significantly impact projects using Chinese cells, which represent the largest portion of capital expenditures.
The company claims a competitive edge as the only non-Chinese manufacturer able to supply US customers with prismatic cells. This positions its batteries as more straightforward replacements for system integrators accustomed to Chinese-made products. Samsung SDI has highlighted various safety features of its designs, such as an aluminum casing and proprietary “No Thermal Propagation” technology, which separates cells with thermal insulation layers.
In addition to cell production, Samsung SDI intends to manufacture integrated BESS solutions in the US. The company showcased two new products at the RE+ clean energy trade show in September, which utilize nickel cobalt aluminum oxide (NCA) cells.
Meanwhile, Trina Storage has solidified its strategic partnership with Lightshift Energy, agreeing to supply equipment for projects totaling more than 1GWh. Trina will provide its Elementa 2.0 and Elementa 2.5 BESS solutions to the developer, which was previously known as Delorean Power. This partnership reflects Trina’s commitment to expanding its footprint in the US energy storage market.
Chinese companies still possess a substantial number of safe harbor projects that have progressed sufficiently to qualify for tax credits before policy changes take effect. Some industry sources suggest that the competitive pricing of batteries manufactured in China may attract large customers, despite the absence of tax credit support. Additionally, Chinese firms may explore manufacturing options in compliant ownership structures within the US or in countries not subject to Foreign Entity Ownership Compliance (FEOC) rules.
Trina Storage has primarily served as a system integrator, utilizing in-house LFP cells for its projects in China, while sourcing from third-party suppliers for its US endeavors. It completed its first US projects in 2024, building them in response to a solicitation from the Massachusetts Municipal Wholesale Electric Company (MMWEC), which represents multiple municipal utilities in the region. The company specializes in distribution-connected energy storage and continues to expand its capabilities in the sector.
