Samsung SDI says discussing supplying Tesla with ESS batteries

South Korea's Samsung SDI is discussing supplying ESS (Energy Storage System) batteries to Tesla in an order reported to be worth around 3 trillion won ($2.11 billion) or more.

The deal, if signed, would mark the latest push by Tesla to reduce reliance on China for key parts. Tesla has signed deals with South Korean companies, Samsung Electronics and LG Energy Solution, to source chips and batteries in recent months.

South Korean battery makers are also scrambling to repurpose electric vehicle battery production lines to produce energy storage systems, hit by the elimination of U.S. subsidies.

Samsung SDI said during an earnings call earlier this month that it has seen a big fall in battery demand from joint venture partner Stellantis, and will convert some of its EV production lines in the U.S. state of Indiana to make ESSs.

South Korean newspaper the Korea Economic Daily said on Monday that Samsung SDI had reached an agreement to supply Tesla with ESS batteries over three years.

Tesla did not have an immediate comment.