FILE PHOTO: Tesla logo is seen in this illustration taken July 23, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

By Heejin Kim and Hyunjoo Jin

SEOUL (Reuters) - South Korea's Samsung SDI said on Tuesday it is in talks to supply energy storage batteries to Tesla, in an order that Korean media said could be worth more than 3 trillion won ($2.11 billion).

Samsung SDI shares soared more than 8% on the news.

A deal would mark the latest push by Tesla to reduce reliance on China for key parts, fueled by tariffs and geopolitical tensions.

Tesla has signed deals with South Korean companies Samsung Electronics and LG Energy Solution to source chips and batteries in recent months.

Energy storage batteries have a similar chemistry to automotive batteries and are used to power facilities such as data centers.

South Korean battery makers are repurposing electric vehicle battery production lines to also produce energy storage systems as they are hit by the elimination of U.S. subsidies.

Samsung SDI said in an earnings call in October that it has seen a big fall in automotive battery demand from joint venture partner Stellantis, and will tweak some of its production lines in the U.S. state of Indiana to make energy storage batteries.

A source told Reuters that Tesla and Samsung SDI are discussing supplies of energy storage batteries, while another person said that the annual supply volume would be 10 GWh.

The South Korean newspaper Korea Economic Daily, which first reported the potential deal, said the three-year supply deal would be valued at more than 3 trillion won.

Tesla did not have an immediate comment. A Samsung SDI spokesperson said the deal and its details have not been finalised yet.

Tesla said in an earnings conference call in October that its energy storage business is seeing headwinds due to the increase in competition and tariffs. "Currently all sales procured are from China while we're still working on other alternatives," it had said.

Shares of Samsung SDI rose as much as 8.4% in early trading, trimming gains to 4.7% by mid-morning in Seoul.

(Reporting by Heejin Kim, Hyunjoo Jin, Joyce Lee and Heekyong Yang; Editing by Ed Davies and Muralikumar Anantharaman)