Samsung SDI in talks with global automaker for battery joint venture

South Korea’s Samsung SDI Co. is in talks with a global automaker to launch a battery production joint venture following its partnership last year with Dutch-domiciled multinational automaker Stellantis N.V.

The battery unit of Korea’s top conglomerate Samsung Group said on Thursday it is “discussing with a global carmaker on a battery partnership” for the launch of a joint venture. It declined to elaborate.

Industry officials said Samsung’s new partner could be one of its clients. Samsung SDI currently supplies EV batteries to BMW, Volkswagen, Audi and Volvo in Europe as well as Ford Motor Co. in the US.

Given that Samsung has already formed a production JV in the US, the next plant will likely be set up in Europe in partnership with one of its European clients, they said.

Regarding its JV with Stellantis, Samsung SDI said the two companies plan to begin mass production of electric vehicle batteries from 2025.

Samsung announced in October that it partnered with Stellantis to build a multi-billion-dollar battery facility in the US, joining other Korean battery makers’ move to gain ground in one of the world’s largest electric vehicle markets.

At the joint factory, Samsung SDI plans to manufacture lithium-ion batteries for the North American market. Separately, Samsung also runs a battery pack assembly line in the state of Michigan.

Stellantis, which has global names such as Fiat Chrysler, Peugeot and Maserati under its wing, is the world’s fourth-largest automaking group. In Europe, it runs a battery JV with an affiliate of French oil giant Total.

NO LFP BATTERIES

Samsung SDI said on Thursday it has no plans to make lithium iron phosphate (LFP) batteries, and instead will stick to batteries with high nickel content.

With low energy density and higher thermal stability, LFP cells are cheaper to make compared to other types such as nickel-cobalt-manganese (NCM) batteries. But the LFP type batteries are increasingly becoming a standard for entry-level EVs.

“We are working to achieve cost competitiveness with our type of batteries by producing cobalt-free or cobalt-less batteries,” said a Samsung SDI executive.

The Samsung-Stellantis JV is one of the latest in a series of tie-ups between battery producers and automakers.

LG Energy Solution Ltd., the world’s second-largest battery maker, said earlier this week Ultium Cells LLC, its JV with General Motors Co., will build its third joint factory in Michigan with a $2.6 billion investment.

SK Innovation Co., another Korean battery maker, and its US partner Ford Motor last year kicked off their JV BlueOvalSK, which plans to invest $11.4 billion to build an assembly and battery complex and two additional battery factories in the US.

Meanwhile, Samsung SDI said on Thursday it posted record earnings and sales in 2021 on the back of strong sales of its high-performance Gen 5 batteries with 88% nickel content.

For all of 2021, Samsung SDI’s revenue increased 20% from the previous year to an all-time high of 13.55 trillion won ($11.24 billion), while operating profit rose 59% to 1.68 trillion won.

Write to Hyung-Kyu Kim at khk@hankyung.com
In-Soo Nam edited this article.