Battery-maker looks to seize opportunities as Trump’s tariffs hamper Chinese rivals

Samsung SDI is set to begin mass production of cost-competitive lithium iron phosphate, or LFP, batteries for energy storage systems from as early as late this year, capitalizing on the anticipated decline of Chinese competitors in the US, a major market for power storage.
“Samsung SDI will complete the setup of production equipment for ESS LFP batteries at its ‘mother line’ in the Ulsan plant between July and August,” an industry source familiar with the matter told The Korea Herald on condition of anonymity. “If the new LFP production proves successful, the company may accelerate large-scale manufacturing to the end of 2025, ahead of the initially planned 2026.”
The "mother line" refers to an advanced pilot production line designed to develop and test new manufacturing processes on a smaller scale before commercial production. Unlike a traditional pilot line, which operates on a laboratory scale, a mother line assesses the feasibility of efficiently scaling up production.
So far, Samsung SDI’s Ulsan plant has specialized in producing nickel, cobalt and manganese, or NCM, batteries for ESS, which are more expensive than LFP cells — a segment largely dominated by Chinese battery-makers.
“Amid slowing EV sales, the company is adjusting production lines to prioritize batteries with strong demand, such as ESS, to maintain factory utilization rates. North America is a key target market,” the source said. “Samsung SDI aims to compete directly with Chinese rivals by offering LFP batteries with higher capacity but at comparable prices.”
The source added that the Ulsan plant’s LFP cells will be shipped to Samsung SDI’s battery pack facility in Michigan, where they will be supplied to grid operators and other customers across North America. Last year, the Michigan plant’s electric bike battery pack line was converted for ESS production. Unlike LG Energy Solution and SK On, which operate battery cell manufacturing plants in the US, Samsung SDI assembles battery packs in Michigan using cells produced in South Korea and Hungary.
Samsung SDI’s production ramp-up could help close its nearly yearlong gap with its Korean rival, LG Energy Solution, which plans to begin full-scale ESS LFP battery production this year after retooling its EV battery cell manufacturing facility in Michigan. SK On is also preparing to produce LFP battery cells for ESS in North America as early as this year.
Chinese companies currently dominate in ESS globally, occupying 85 percent of the market in 2023. In contrast, Samsung SDI and LG Energy Solution accounted for 5 percent and 4 percent, respectively, a sharp decline from their combined 55 percent market share in 2020, according to market tracker SNE Research.
Despite China's strong market position, Korean battery-makers are intensifying their ESS business efforts as their Chinese rivals face additional tariffs under the second Trump administration.
While ESS imports from China previously had lower tariffs compared to EV batteries (25 percent), they will be subject to an approximately 38.4 percent tariff starting in 2026, bringing them in line with Chinese-made battery-powered cars.
Notably, Samsung SDI has reportedly secured a 1 trillion won ($681 million) deal with Florida-based NextEra Energy, one of the largest clean energy companies in the US, to supply premium NCM batteries for ESS applications. In a regulatory filing Friday, the company stated, “We plan to sign contracts for multiple projects with our customers, and the supply volume will be determined after the deal is finalized.”
By Byun Hye-jin (hyejin2@heraldcorp.com)