Tesla (TSLA) reportedly secures massive $2.1 billion battery deal with Samsung SDI, but not for its cars

Tesla has reportedly secured another major battery supply partner, but it’s not for the product you might think.

According to a new report from the Korea Economic Daily, Tesla has reached a substantial agreement with Samsung SDI. The deal is said to be worth over 3 trillion won (approximately $2.1 billion) and will see the South Korean battery giant supply cells to Tesla over a three-year period.

But here’s the key part: This supply is reportedly for Tesla’s Energy Storage System (ESS) business.

That means these cells are destined for Megapack and possibly Powerwall products, not for Tesla’s electric vehicles.

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The report, which cites an unnamed battery industry source, marks the first large-scale supply agreement between Samsung SDI and Tesla. For years, the two companies have been in talks, with most speculation centered on Samsung building 4680 cells, a cell format Tesla pioneered. While Samsung is indeed ramping up its own 46-series cell production, this new deal appears to be focused entirely on LFP cells for stationary energy storage.

When reached for comment, Samsung SDI officially stated that “nothing has been finalized yet,” which is a common response to such reports before a deal is formally announced. Tesla has not commented.

This new deal with Samsung SDI follows another massive ESS battery agreement Tesla signed with a different South Korean supplier, LG Energy Solution, for lithium-iron-phosphate (LFP) batteries. Currently, Tesla exclusively uses cells from CATL and BYD for its energy storage products, but the company recently noted a bed to diversify supply due to the tariffs put in place on Chinese products.

Tesla has also been working on deploying its own LFP battery cell manufacturing in the US to partially offset Chinese supply.

Electrek’s Take

The company’s energy storage division has been a silver lining amid two years of decline in its EV division.

The growth has been impressive despite increased competition.

It’s the only segment where Tesla is truly production constrained, and more specifically battery supply constrained rather than demand constrained.