Why Korean Battery Makers are converting EV lines in the US, right now.
Samsung, LG, and SK are making the same pivot.
Summary
Korean Battery Makers are converting EV lines in the US
Battery Industry Pulse: weekly roundup.
For years, Korean battery manufacturers ignored lithium-iron-phosphate (LFP) chemistry. They bet on high-nickel NMC and NCA cells, chasing energy density for EVs.
Now, they’re racing to close that gap within the next few years.
Last week, Reuters and Korea Economic Daily reported that Samsung SDI is in advanced talks with Tesla to supply LFP batteries for U.S. energy storage systems. The deal: roughly 10 GWh annually, worth about $2 billion over three years.
Samsung SDI announced during its earnings call that it will convert some EV production lines at its Indiana plant to make ESS batteries, responding to sharp drops in battery demand from Stellantis.
If finalized, the Tesla–Samsung SDI agreement would mark a turning point in U.S. battery manufacturing.
Chinese incumbents built the LFP ecosystem. Korean manufacturers are now positioned to enter the market strongly in the U.S.
Can they execute fast enough? That’s what the next 24 months will determine.
The Great Repurposing
Samsung’s Tesla deal follows a clear pattern across all three Korean battery giants.
LG Energy Solution signed a $4.3 billion agreement with Tesla Energy in 2025 to supply LFP cells through 2030 for Megapack battery storage systems.
SK On locked in 7.2 GWh with Flatiron Energy Development for containerized storage units starting late 2026.
The target is grid-scale battery energy storage systems.
Korean battery makers are converting EV production lines in the U.S. into ESS lines. Their customers anticipated the EV slowdown following the end of federal tax credits and adjusted orders accordingly.
The impact hit Korean firms directly through their joint ventures with GM, Stellantis, and Ford. Rather than idle capacity, they’re pivoting to storage.
The timing creates an opening. U.S. grid-storage installations hit 5.6 GW in Q2 2025, a quarterly record.
Chinese battery imports face tariffs and regulatory scrutiny.
Korean manufacturers have factories on American soil, existing customer relationships, and two decades of lithium-ion manufacturing discipline. LFP was never their focus. Now it’s their bridge to the next growth phase.
Why Korean Manufacturers Can Actually Pull This Off
LG Energy Solution, Samsung SDI, and SK On collectively operate over 400 GWh of global battery manufacturing capacity. That expertise transfers partially to LFP production, but only partially.
LFP cells use different electrode designs, mixing ratios, and process windows than the high-nickel chemistries Korea perfected.
Typical learning curves run 3–5 years from pilot to stable yields, then 2–3 more for cost optimization.
Korean firms are trying to compress that into 2–3 years while also building a compliant material chain.
It’s ambitious, but not unrealistic.
They perfected industrial discipline through brutal competition with Japanese manufacturers in the 2000s, then against Chinese rivals in the 2010s.
They know how to ramp production under pressure. They’ve done it before with NMC, scaling from pilot lines to multi-gigawatt factories while maintaining yield rates above 90%.
LFP manufacturing shares the same industrial backbone: coating, calendering, assembly, and formation. Chemistry differs, but process logic is familiar.
They also have capital, customer commitments, and policy support.
China built its LFP edge through 15 years of iteration.
Korea is compressing that timeline through resource deployment and operational discipline.
Execution speed and cost control will decide the outcome.
The Cathode Trap
99% of LFP cathode active material production capacity is in China, according to IEA analysis.
Hunan Yuneng, Shenzhen Dynanonic, and several other Chinese companies control the market. China’s production of LFP cathode materials in 2024 exceeded 2.3 million metric tons, up about 84% year-on-year..
Non-Chinese capacity barely exists.
Korean battery manufacturers are trying to build a non-Chinese cathode supply from scratch.
SK On signed a memorandum of understanding with L&F in July 2025 for LFP cathode supply to North America. L&F is one of the few non-Chinese cathode manufacturers with planned LFP production capability, targeting 2026.
LG Chem is building LFP cathode capacity in Morocco through a joint venture with a Chinese company. LG Chem will need to find a way to be FEOC compliant. Morocco offers lower labor costs than Europe or North America and direct access to phosphate rock from local mines.
Other partnerships involve Mitra Chem in California, developing LFP and LMFP cathodes for domestic supply.
Korean firms must replicate China’s cathode ecosystem without access to Chinese expertise or equipment. Beijing’s export controls, introduced in 2025, restrict shipments of advanced cathode materials and some manufacturing equipment used to produce them.
The timeline collision is brutal.
Korean cell plants opening in 2025 and 2026 need cathode material now to ramp production and fulfill customer commitments. Most non-Chinese cathode projects won’t reach volume production until 2027 or 2028.
The U.S.-China-Korea Triangle
This moment clarifies the new structure of global battery competition.
The U.S. wants domestic battery production but lacks the industrial base to build it quickly.
China has the most efficient LFP supply chain in the world, but faces regulatory and tariff barriers in the U.S. market.
Korea has manufacturing discipline and customer relationships, but it depends on Chinese materials and faces a compressed timeline.
Each player needs the others, yet geopolitical tension prevents full cooperation.
Korean manufacturers sit at the center of this triangle. They’re building factories in the U.S. to serve American customers while scrambling to replace Chinese inputs.
The Samsung SDI and Tesla deal reveals how high the stakes are. Tesla needs a reliable LFP supply for Megapack systems. Samsung needs volume commitments to justify factory conversions. Both need non-Chinese cathode material that doesn’t exist at scale yet.
The deal works only if Korean manufacturers execute flawlessly on technology transfer, supply chain development, and cost reduction simultaneously. There’s no margin for delay.
What Comes Next
Korean battery manufacturers are making the biggest strategic pivot in their history. After two decades focused on high-nickel chemistries for EVs, they’re now racing to dominate U.S. LFP production for energy storage.
The opportunity is real. U.S. energy storage installations are growing fast.
But success requires solving the cathode problem in the next 24 months. L&F, LG Chem, Mitra Chem, and other non-Chinese suppliers must hit production targets on schedule. Korean manufacturers must compress typical learning curves by half. U.S. policy must remain stable long enough for investments to pay off.
If Korean firms execute, they’ll control the U.S. LFP market for the next decade. They’ll have proven they can compete with Chinese manufacturers on cost and scale. They’ll have secured their position as indispensable partners in the U.S. energy transition.
If they miss, Chinese manufacturers will eventually find pathways back into the U.S. market, either through partnerships, tariff relief, or regulatory changes. The window for Korean dominance will close.
The U.S. LFP market has shifted from technology competition to geopolitical supply chain management. Access, timing, and execution now matter more than technical optimization alone.
China built the LFP ecosystem over fifteen years. Korea is trying to replicate it in two. The U.S. market hangs on whether they can.
Now, let’s look at this week's battery market developments.
Battery Industry Pulse: Weekly Roundup
Metals
Components
Battery
Chinese EV makers scramble for CATL batteries to deliver more cars before extra tax costs hit
XPENG unveils next-generation humanoid robot IRON, to begin mass production by end of 2026
Battery recycling
BESS
Passenger Vehicles
Charging infrastructure
📝 I offer LinkedIn ghostwriting services for battery founders - Book a free strategy call
🤝 For newsletter sponsorships - Click here
🤳 You can find my digital products (The Battery Starter Kit…) here - 10% discount (Code NEWSLETTER10)
Well, Sk is banned in the USA due to the LG SK lawsuit back in 2021. Can only supply Ford replacements. CATL took over Ford in 2023 1/2 for packs. SK may be a vendor through CATL. LG and SK probably no speak.
One SK person was a bit upset with that comment. LG was making the 4160 for Tesla.
CATL has a deal with Tesla in Nevada. So all these guys are all over each other.
TESLAs Asia cell vendors, due to their 40% or more market share, have to use Asian suppliers.
Samsung with NMC prismatic in the Jeep recalls. LG with the NMC LFP in the GM issues,
LG has all the NMC module issues for UBESS. LG RBESS recalls Australia.... It is so strange to keep up with this mess.
NMC is more profitable to recycle than LFP, but LFP's mass is better suited for graphene.
Recycling is a very low, .1% if you can find any facility with anything going out but inbound packs.
I reckon about 80,000 EVs annually are recycled. 18 billion pounds of cells produced worldwide in 2024 ( average 1000 pounds per EV).
With the overreach by the State of California, SB283, sub 8502, final October 6th, localities have no rights to stop UBESS. So the race is on. Others should follow suit until the AI crash. All the while, China produces more electricity from burning trash than it puts in its landfills. Black Cat, White Cat Learn Mandarin
What an excellent overview and very interesting situation for Korean battery makers and the supply squeeze on carbon cathodes.