In recent days, the topic of “Tesla plans to ‘de-China-fy’ its supply chain” and “Samsung may supply energy storage batteries to Tesla” continues to ferment on the Chinese internet.
According to a report by Reuters on November 4, South Korean Samsung SDI stated that they are in talks with Tesla regarding the supply of energy storage batteries. This deal would be Tesla’s latest move to further reduce its reliance on key components from China, driven by tariff pressures and escalating geopolitical tensions.
Tesla has not yet commented on this matter. A spokesperson for Samsung SDI stated that the transaction and its details have not been finalized.
The first to report on this potential transaction, the Korean Economic Daily, stated that the three-year supply agreement is valued at over 30 trillion Korean won (approximately $21.1 billion).
Chinese internet platform “AutoHome” reported on November 5 that on the 4th, a regulatory document from Samsung SDI revealed that the company is in discussions with Tesla on supplying energy storage batteries, intending to supply Tesla with approximately 10GWh of energy storage batteries annually for three years, totaling 30GWh. The deal is estimated to be worth around 1 to 1.5 trillion Korean won annually. Based on this calculation, the procurement amount may exceed 30 trillion Korean won (approximately 15 billion RMB).
If this deal is reached, it would signify another significant move by Tesla in the “de-China-fication” of its supply chain.
As reported by Chinese media outlet “Tech Planet” on November 5, energy storage is a core business of Tesla and a key driver of its revenue and profitability, with most of the energy storage batteries currently relying on Chinese suppliers, mainly CATL.
In April of this year, Tesla’s Chief Financial Officer Vaibhav Taneja mentioned that U.S. tariffs had a “significant impact” on the company’s energy business and they were seeking to partner with suppliers outside of China.
In addition to the potential cooperation with Samsung SDI, Tesla has signed chip supply agreements with Samsung Electronics and battery supply agreements with LG Energy Solution.
On July 30, LG Energy Solution announced securing a phosphate iron lithium (LFP) battery long-term contract worth 59.442 trillion Korean won (approximately $43 billion), lasting for three years with an optional extension of an additional four years starting from August 1. Due to confidentiality clauses, LG Energy Solution did not disclose the customer information, but it is widely speculated within the industry that Tesla is the buyer.
Multiple Chinese media reports indicated that several sources close to the deal almost simultaneously confirmed that Tesla is indeed the buyer, and the batteries will be supplied exclusively to Tesla’s energy storage systems, marking the largest single battery order ever signed by LG.
On July 28, Tesla CEO Elon Musk tweeted that “Samsung’s giant new factory in Texas will be specifically for producing Tesla’s next-generation AI6 chips. Its strategic importance is significant.”
According to “AutoHome” on November 5, analysts point out that Tesla’s introduction of Samsung SDI will help in establishing an energy storage battery supply system supported by both LG and Samsung in the North American market. This move can assist Tesla in utilizing the “Inflation Reduction Act” for tax exemptions, enhancing product competitiveness. The presence of both Korean companies in Tesla’s North American energy storage supply chain creates a “double insurance” scenario. If Samsung SDI successfully supplies, it would achieve a significant breakthrough in the U.S. market, leading to substantial revenue and technological influence.