As Trump shoves China, Korean battery firms eye big win in U.S. with ESS

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As Trump shoves China, Korean battery firms eye big win in U.S. with ESS

Published: 26 Mar. 2025, 18:36 Updated: 27 Mar. 2025, 18:08

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

LG Energy Solution's energy storage systems (ESS) for grids in California [LG ENERGY SOLUTION]

Energy storage systems (ESS) have emerged as the next golden opportunity for Korean battery makers to target the U.S. market, benefiting from U.S. President Donald Trump's hostile tariff policy against China.

ESS demand is soaring predominantly in North America thanks to AI-driven data centers and renewable energy projects like solar and wind power. China, the current dominant player in the ESS market, is facing limited access to the U.S. market with Trump's 45 percent tariff imposed on Chinese batteries and parts.

LG Energy Solution's ESS product equipped with lithium iron phosphate batteries. [LG ENERGY SOLUTION]

LG Energy Solution, the country's largest battery manufacturer, inked another ESS deal Wednesday with the Taiwan-based Delta Electronics in a pact worth up to an estimated 1 trillion won ($682 million).

The contract includes a supply of roughly 4 gigawatt-hours of residential ESS batteries for five years to the U.S. market, equivalent to the electricity that 400,000 households use over the course of a day.

The previous day, the company had announced an ESS deal with PGE Polska Grupa Energetyczna, Poland's largest state-run energy company, to supply almost 1 gigawatt hour of grid-scale ESS batteries between 2026 and 2027.

Last year, LG Energy inked an ESS pact, potentially worth up to 2 trillion won, with Minnesota-based Excelsior Energy Capital and another 2 trillion won deal with New York's Terra-Gen.

Samsung's latest Samsung Battery Box batteries for energy storage systems, which is said to up energy density by 37 percent from traditional products. [SAMSUNG SDI]

Once a market dominator for ESS, Korea once led the market with a share of more than 70 percent. But while they focus on premium nickel cobalt manganese batteries for EVs, the share was steeply stolen by Chinese players like Contemporary Amperex Technology and BYD with their edge in low-priced lithium iron phosphate (LFP) batteries.

“Applying 45 percent tariffs, China's LFP batteries lost their price competitiveness in the U.S. market,” said Han Byeong-hwa, an analyst at Eugene Investment & Securities.

“China's 80 percent share of the U.S. ESS market will be largely eaten by Korean battery makers, who have also secured local production of LFP batteries.”

LG Energy Solution has an LFP battery plant for ESS in Holland, Michigan, which is set to start production in the second half of this year. It also has a plant in Arizona, which has halted the construction while the company balances out supply. LG Energy Solution CEO Kim Dong-myung pledged that he would raise ESS battery sales fivefold by 2028 by reducing the company's concentration on EV batteries.

SNE Research predicted that the global ESS market will grow at an annual rate of 35 percent, to reach $80 billion, in 2035.

Samsung SDI in March also sealed a deal with Florida energy company NextEra Energy to supply ESS batteries, worth up to 437.4 billion won ($300 million), part of a massive pact reportedly sized 1 trillion won.

Samsung SDI currently only produces pricier nickel cobalt aluminum-based ESS batteries at its plants in Ulsan and China. But it is in the process of building a production line for LFP batteries in Ulsan and is also considering building a plant in North America.

“We have already secured clients to cover up 90 percent of our capacity for ESS batteries,” said Park Jong-sun, executive vice president of the strategic marketing team, during a conference call in January.

SK On has yet to announce plans for LFP battery for ESS but is expected to make an earnest entry in 2026.

BY SARAH CHEA [[email protected]]