Samsung SDI will begin lithium iron phosphate (LFP) battery cell production in the United States in the third quarter of 2025, and the company expects demand to outstrip its initial manufacturing capacity. The move marks the first major Korean battery maker to localize LFP output on American soil, positioning Samsung SDI to capture a growing share of the stationary storage market that has increasingly favored the chemistry for its lower cost, longer cycle life, and reduced reliance on critical minerals like nickel and cobalt.
The timeline aligns with the Inflation Reduction Act’s domestic content requirements, which grant tax credits to energy storage projects using cells manufactured in the US or by free-trade partners. By producing LFP cells domestically, Samsung SDI enables its customers — primarily utility-scale storage developers and integrators — to qualify for the full 30 percent investment tax credit plus the 10 percent domestic content adder. That economic incentive has accelerated a wave of factory announcements across the battery supply chain, but Samsung SDI’s entry is notable because it brings a tier-one supplier with proven automotive-scale quality systems into a segment historically dominated by Chinese manufacturers.
LFP’s rise in stationary storage reflects a fundamental shift in project economics. While nickel-manganese-cobalt chemistries still lead in energy density for electric vehicles, stationary applications prioritize cost per kilowatt-hour over weight and volume. LFP cells now deliver 6,000 to 10,000 cycles at depth of discharge rates that make them cheaper over a 20-year project life, even before accounting for the IRA bonuses. Samsung SDI joins a competitive field that includes CATL’s licensing deals, BYD’s expanding footprint, and domestic startups like Our Next Energy — but its existing relationships with major US integrators and utilities give it a channel advantage that pure-play newcomers lack.
The company’s warning that demand will exceed production underscores how tight the US-made cell market remains. Samsung SDI has not disclosed the initial capacity of its US line, but industry analysts estimate early volumes in the low single-digit gigawatt-hours — a fraction of the 100+ GWh of storage deployments projected annually by 2030. Scaling
Original source: Energy Storage News