Indiana Project Shifts from a Potential Idle Asset to a U.S. Energy Storage Expansion Platform

Overview

This report assesses the strategic and valuation implications of Samsung SDI’s plan to take full ownership of the Indiana electric vehicle battery project originally planned jointly with GM and transform it into a U.S. energy storage battery base. JPMorgan believes that, against the backdrop of slowing electric vehicle demand and suspended construction of the original JV plant, this plan can convert a potential idle asset into a scalable local capacity platform, ease the company’s U.S. energy storage supply constraints, and strengthen medium- to long-term core earnings and advanced manufacturing production tax credit benefits.

Core views

First, the transaction is expected to eliminate the main risk that the W275 billion already invested in the project becomes an idle asset and incurs impairment. Second, the company’s existing U.S. energy storage orders are estimated at 60–90GWh, equivalent to about 3–4 years of order coverage for current capacity, providing demand support for the new capacity. Third, the 27–36GWh of added capacity can bring total U.S. capacity to 56–65GWh; based on JPMorgan’s forecast of 303GWh U.S. energy storage demand in 2030, the share at full capacity would be about 20%. Fourth, 2028 will still be in the early ramp-up stage, so the forecast upgrade is limited, but after 2029, increased localized production will improve both core earnings and tax credits. Fifth, rapid growth in BBU/UPS, substitution of Chinese products by Korean suppliers, Korean policy support, and potential sale of part of Samsung Display’s equity could all form additional catalysts.

Analysis framework

The report combines project asset status, U.S. energy storage orders and demand forecasts, capacity ramp-up pace, segment earnings forecasts, and advanced manufacturing production tax credits to update 2026–2029 earnings scenarios; valuation uses a sum-of-the-parts method, combining core business enterprise value, tax credit value, and net debt to derive the target market capitalization and target price per share, and compares them with market consensus expectations.

Methodology notes

• Valuation MethodSum-of-the-Parts Valuation Method

  Separately assess the value of the core business and advanced manufacturing production tax credits, then deduct net debt.

  Core business enterprise value is about W46.2 trillion, based on 2028 mid-cycle EBITDA excluding tax credits and a 12x valuation multiple; tax credit value is about W5.17 trillion, after which estimated net debt of about W1.26 trillion in 2027 is deducted, resulting in a target market capitalization of about W50.1 trillion and a target price of W640,000.

• Earnings ForecastCapacity Ramp-Up and Order Demand Analysis

  Adjust medium-term forecasts based on the production schedule of new capacity, order coverage, and localized production benefits.

  The report assumes the Indiana base will add 27–36GWh of energy storage capacity and be in the initial ramp-up stage in 2028, so operating profit for that year is raised by only 5%; more significant contributions from core earnings and tax credits are expected to be released from 2029 onward.

• Market Share CalculationCapacity-to-Demand Ratio Method

  Divide the company’s potential U.S. energy storage capacity by forecast total U.S. energy storage demand.

  The company’s U.S. energy storage capacity is expected to reach 56–65GWh, compared with a 2030 U.S. energy storage demand forecast of 303GWh, corresponding to a potential share of about 18%–21%, summarized in the report as about 20%.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Samsung SDI (006400.KS)

  The core covered company in the report and a direct beneficiary of U.S. energy storage capacity expansion and earnings recovery.

  Strengths

  Has a foundation of 60–90GWh of U.S. energy storage orders; the new base can form 56–65GWh of local capacity; BBU/UPS demand growth, supplier substitution, and tax credits provide multiple earnings drivers.

  Weaknesses

  The electric vehicle business remains affected by slowing demand, the new base requires additional investment and a ramp-up period, and the 2026 operating margin is expected to be only 2.3%.

  Comparison

  JPMorgan’s 2027 and 2028 operating profit forecasts are about 19% and 31% above market consensus, respectively, showing greater optimism on medium-term earnings recovery.

  Risks

  Electric vehicle or energy storage sales falling short of expectations, margin pressure in small batteries, capacity conversion or production delays, and changes in policy support and tax credits.

• General Motors (GM)

  Plans to sell its 49.9% stake in the Indiana battery JV project, while continuing next-generation prismatic battery technology cooperation with Samsung SDI.

  Strengths

  Exiting the originally planned JV plant can reduce new capacity commitments amid slowing electric vehicle demand, while retaining the technical cooperation relationship.

  Weaknesses

  No longer directly holds capacity interests in the project, and its existing battery capacity of about 80GWh with LGES reflects weaker demand for additional electric vehicle battery capacity.

  Comparison

  Compared with the original arrangement to jointly build an electric vehicle battery plant, the new plan has Samsung SDI independently owning the project and focusing mainly on energy storage use.

  Risks

  Transaction completion conditions, execution of technical cooperation, and changes in U.S. electric vehicle demand may affect the value of subsequent cooperation.

Key data

• GM’s planned stake sale49.9%Samsung SDI plans to acquire this stake and wholly operate the Indiana base.
• Cumulative project investmentW275 billionThis is the amount already invested corresponding to Samsung SDI’s original 50.1% stake, currently recorded as construction in progress.
• Planned new U.S. energy storage capacity27–36GWhThe original electric vehicle battery JV project is planned to be transformed into a scalable energy storage battery base.
• Potential total U.S. energy storage capacity56–65GWhIncludes 29GWh from the Stellantis JV project at full capacity and the new Indiana capacity.
• Estimated U.S. energy storage orders60–90GWhJPMorgan calculates this based on management’s statement that current capacity has about 3–4 years of order coverage.
• 2030 U.S. energy storage demand forecast303GWhBased on this, Samsung SDI’s potential market share at full capacity is estimated at about 20%.
• 2028 operating profit forecastW2.934 trillionRaised 5% from the previous forecast of W2.789 trillion, with the operating margin forecast increased from 11.9% to 12.5%.
• 2026–2028 operating profit forecastsW358 billion, W1.614 trillion, W2.934 trillionThe report expects the company to return to profitability in 2026 and accelerate growth in 2027–2028.
• Target priceW640,000As of December 2027, versus the previous W630,000.
• Current price listed in the report and potential upsideW459,500; approximately 39.3%The current price date is August 11, 2026, and the potential upside is calculated based on the target price relative to the current price.

Impact & implications

The near-term significance of the transaction is mainly to reduce the asset impairment risk caused by project suspension and to find a more demand-supported use for existing construction in progress; the medium-term significance is to break Samsung SDI’s bottleneck in U.S. local energy storage supply and better fulfill 60–90GWh of orders; the long-term significance is to expand U.S. localized production, increase core business scale, and obtain more advanced manufacturing production tax credits. Since 2028 is still the early stage of capacity ramp-up, the target price increase is limited, and the investment thesis depends more on capacity utilization, order fulfillment, and policy benefits after 2029.

Risks

• Growth in electric vehicle or energy storage system sales is slower than expected.
• Margin pressure in the small battery business is higher than expected.
• Electronic materials’ market share gains among affiliated customers’ semiconductor and display businesses are slower than expected.
• Delays in the acquisition, conversion, equipment installation, or mass production ramp-up of the Indiana project.
• Utilization of new energy storage capacity or the actual conversion rate of the 60–90GWh order backlog falls short of expectations.
• Adverse changes in U.S. local manufacturing policy, advanced manufacturing production tax credits, or Korean policy support.
• New capital expenditures, operating costs, or financing needs are higher than current estimates.

What to watch

• Final terms, approval progress, and closing timing of the acquisition of GM’s 49.9% stake.
• Conversion capital expenditures, equipment installation timing, and 27–36GWh production plan for the Indiana base.
• The speed at which U.S. energy storage orders are converted from a 60–90GWh order backlog into actual shipments.
• The pace at which the Stellantis JV base reaches 29GWh full capacity and the synergies between the two bases.
• Whether core operating profit and advanced manufacturing production tax credit contributions in 2028–2029 meet forecasts.
• U.S. energy storage demand, the trend of substitution away from Chinese suppliers, and changes in related industrial policies.
• BBU/UPS business growth, small battery margins, and electronic materials market share.
• Whether the company sells part of its Samsung Display equity around year-end and the use of proceeds.