Sungrow picks Samsung SDI cells to protect US storage sales

Sungrow Power Supply moved on Sept. 9 to procure lithium iron phosphate battery cells from South Korea's Samsung SDI to sustain equipment deliveries into the United States.

The proposed three-year supply agreement involves annual deliveries of several gigawatt-hours, an off-take volume that industry analysts estimate at roughly 10 gigawatt-hours annually worth at least 3 trillion won ($2.2 billion).

The procurement pivot responds directly to United States trade enforcement under Section 301 tariffs, which impose a 25% import duty on Chinese lithium-ion battery cells destined for stationary utility installations.

Sungrow accounts for roughly 16% of the global grid-scale energy storage system integration market, maintaining heavy reliance on domestic Chinese cell manufacturers for projects across Asia, Europe and the Middle East.

Neither company published formal regulatory filings on the Shenzhen Stock Exchange or the Korea Exchange, but people familiar with the transaction confirmed the bilateral negotiations on Sept. 9 to industry publications.

Sungrow and Samsung SDI did not respond to requests for comment regarding commercial terms, contract values, supply volumes or projected manufacturing schedules, according to reporting by trade publication ESS News.

The arrangement follows reports published Aug. 31 by South Korean industry outlet The Elec, which disclosed that Samsung SDI was negotiating a multi-trillion-won supply framework with a leading global storage integrator.

The arrangement is designed to route non-Chinese cells into Sungrow utility enclosures bound for American power developers who face escalating trade penalties and strict interconnection deadlines.

For Samsung SDI, the off-take agreement secures an anchor customer for its StarPlus Energy manufacturing facility in Kokomo, Indiana, an electric-vehicle battery site developed jointly with automaker Stellantis.

Samsung SDI is converting 21 gigawatt-hours of the 30-gigawatt-hour Indiana facility to produce stationary storage cells, responding to sluggish passenger electric vehicle adoption across North America.

The converted manufacturing footprint encompasses three production lines at the Kokomo plant, where Samsung SDI has begun placing equipment orders to support large-scale cell fabrication.

The transaction reunites two corporate partners with an extensive operating history in energy storage hardware manufacturing, reversing a formal corporate separation completed four years ago.

Sungrow and Samsung SDI established a $170 million joint venture in Hefei, China, in 2014, supplying integrated systems that combined Korean cells with Chinese power conversion electronics.

That joint entity delivered commercial and industrial storage units across North America, securing certification under American safety standards UL1741-SA and UL9540 in May 2020.

Samsung SDI divested its entire equity stake in the Hefei joint venture in the third quarter of 2022, redirecting resources toward proprietary prismatic chemistries and dedicated American manufacturing plants.

The renewed commercial arrangement demonstrates how escalating trade barriers between Washington and Beijing are forcing Chinese system integrators to adjust their component procurement.

United States utility developers seeking investment tax credits under the Inflation Reduction Act must satisfy stringent domestic-content thresholds and avoid hardware classified under foreign entity rules.

Import duties of 25% on Chinese battery cells erode operating margins on utility-scale contracts, making imported Chinese packs uncompetitive against cells produced in North American or allied facilities.

Sungrow packages utility storage hardware under its PowerTitan brand, integrating power conversion systems, liquid-cooling loops and energy management software into standardized container units.

By incorporating Samsung SDI cells into those enclosures, Sungrow can supply certified grid systems to American utilities without redesigning its core power electronics or control architecture.

Samsung SDI has established itself as the sole non-Chinese manufacturer preparing domestic prismatic lithium iron phosphate cells at commercial scale within the United States.

Lithium iron phosphate — a battery chemistry using iron and phosphate cathode material that avoids costly nickel and cobalt — has become the dominant technology for stationary grid installations.

Samsung SDI has accumulated multibillion-won North American storage orders, including a deal exceeding 2 trillion won signed in late 2025 with an infrastructure developer.

Samsung SDI secured an additional 1.5 trillion won ($1 billion) storage supply contract in March 2026, agreeing to deliver nickel-cobalt-aluminum and iron-phosphate cells through 2029.

The companies have not published signed supply filings, and official notices do not state confirmed delivery volumes, pricing or whether shipments will originate exclusively from Indiana.

The two suppliers aim to finalize binding commercial terms in the fourth quarter of 2026 as Samsung SDI completes conversion equipment installation at the Indiana complex.

Initial commercial shipments from the Kokomo facility are scheduled to begin in early 2027, marking the commercial debut of Samsung SDI's American-made stationary storage cells.