United States: Samsung SDI to Repurpose US EV Battery Line for ESS, Reusing Underutilized Equipment

[Smart2020 = Song Ho-gil, Reporter] Samsung SDI is converting its U.S. electric vehicle (EV) battery production lines for use in energy storage systems (ESS), aiming to enhance the utilization rate of its manufacturing equipment. The company’s strategy is to leverage production lines with low operating rates, caused by the slowdown in the U.S. EV market, to meet the growing demand for ESS. The company explained that this approach offers operational efficiency benefits, as most of the existing manufacturing equipment can be repurposed.

According to Samsung SDI on the 6th, the company is in the process of converting its existing EV battery production line at the Star Plus Energy (SPE) plant in Indiana, U.S., into a production line for lithium iron phosphate (LFP) batteries for ESS.

A Samsung SDI official stated, “The U.S. EV market is currently in a downturn, resulting in low operating rates for our existing EV battery production lines. By utilizing these lines to produce ESS batteries, we can leverage our existing infrastructure, which provides advantages in terms of operational efficiency.”

A key feature of this production line conversion is the significant reuse of existing manufacturing equipment. According to the company, ESS batteries and EV batteries share a fundamental structure, allowing for the repurposing of most of the existing equipment.

In early October, Samsung SDI began mass production of LFP battery cells for ESS at the SPE plant. The company started shipping the cells in mid-October and, after completing the module and box assembly processes, is scheduled to begin delivering finished Samsung Battery Box (SBB) products to customers in December.

The company is also accelerating the expansion of its production capacity. Samsung SDI plans to convert two additional production lines, currently dedicated to nickel-cobalt-aluminum (NCA) batteries, for LFP production, with phased operations set to begin in the first half of 2027. The company has already secured orders for the volume to be supplied from these lines.

The expansion of the ESS business is driven by increasing demand in the U.S. market. As of October this year, Samsung SDI has secured orders exceeding 60 GWh (gigawatt-hours), primarily in the U.S. utility-scale ESS market. The company estimates that the secured order volume will allow it to operate its U.S. SPE and Ulsan production lines at full capacity through 2028.

Samsung SDI is also pursuing the establishment of additional production bases in the U.S. The company is preparing for the mass production of LFP batteries for ESS by converting its joint venture with General Motors (GM), Synergy Cells, into a standalone production site. It is optimizing the design of the existing EV battery plant for ESS production, with the goal of commencing mass production between the second half of 2028 and early 2029.

Samsung SDI is also seeing continued performance improvement, driven by growing demand for batteries in energy storage systems (ESS) and artificial intelligence (AI) data centers. In the third quarter of this year, consolidated revenue reached 4.6856 trillion won, and operating profit was 407.8 billion won, representing increases of 20.9% and 100.1%, respectively, compared to the previous quarter. Operating profit in the battery division was 361.9 billion won, with improvements attributed to increased sales of battery backup units (BBU) for AI data centers, the expansion of new electric vehicle projects, and compensation payments from customers.

As the LFP production line for ESS at the company’s U.S. SPE facility began mass production last month, the related performance improvement is expected to materialize from the fourth quarter onward.

During its third-quarter earnings call, Samsung SDI stated, “Going forward, we see it as a critical task not only to expand order intake but also to execute those orders stably in line with customer schedules. We will continue to drive business growth by preparing for the expansion of LFP mass production and the development and launch of next-generation SBB products as planned.”