Samsung SDI and L&F Sign Mid- to Long-Term LFP Cathode Supply Deal, "Accelerating Push into U.S. ESS Market"

Samsung SDI has secured a domestic supply chain for key materials used in lithium iron phosphate (LFP) batteries, laying the groundwork for its push into the North American energy storage system (ESS) market.
On the 24th, Samsung SDI announced that it had signed a mid- to long-term supply agreement with L&F for cathode materials used in LFP batteries. Under this contract, Samsung SDI will receive from L&F about 1.6 trillion won worth of cathode materials needed to produce LFP batteries for ESS over the three years starting next year.
The company also secured an option to receive additional supplies for another three years after that period. ESS batteries using the LFP cathode materials secured under this contract will be produced at StarPlus Energy (SPE), the joint venture between Samsung SDI and Stellantis located in the State of Indiana in the United States.
SPE has been gradually converting some of its production lines from electric vehicle batteries to ESS batteries since the fourth quarter of last year. Starting in the fourth quarter of this year, it plans to mass-produce LFP batteries in addition to its existing high-nickel ternary lithium nickel cobalt aluminium oxide (NCA) batteries.
This agreement is the world’s first large-scale LFP cathode supply contract signed by a company outside China. Observers say it is particularly significant given the global shift away from Chinese suppliers in the battery supply chain, following the U.S. government’s tighter origin rules under the Prohibited Foreign Entity (PFE) rules.
Samsung SDI expects that the deal with L&F will allow it to build a stable domestic supply chain for LFP materials and strengthen its competitive edge in the North American ESS market.
In August last year, L&F became the first non-Chinese company to launch a new investment in LFP cathode materials and is now building production facilities with an annual capacity of 60,000 tons. The first-phase 30,000-ton facility is scheduled for completion next month, and after trial runs and customer testing, the company plans to begin full-scale mass production in the third quarter of this year.
Starting with this contract, L&F plans to actively support Korean battery makers’ entry into the North American LFP ESS market. At the end of last year, Samsung SDI signed an LFP ESS battery supply contract worth around 2 trillion won with a major U.S. energy development and operations company, and more recently secured another ESS battery supply deal worth about 1.5 trillion won with a U.S. energy specialist, steadily expanding its order backlog.
A Samsung SDI representative said, "We have proactively signed a supply contract with a domestic partner to meet growing demand for de-risking from Chinese suppliers in the materials market," adding, "Through this agreement, we will further strengthen our competitiveness in the North American market and create more business opportunities."
Ryu Seung-heon, Chief Financial Officer (CFO) of L&F, said, "We are actively exploring supply opportunities not only with Korean battery makers but also with overseas automakers and global ESS companies, so we expect our growth momentum to continue," and added, "We are planning strategic growth measures such as allocating volumes by customer and expanding additional production lines."

eastcold@fnnews.com Reporter Kim Dong-chan Reporter