Samsung SDI Co., the world’s No. 6 electric vehicle battery maker, is set to build a plant in the US with General Motors Co., spending about 5 trillion won ($3.8 billion) to expand their presence in the third-largest global EV market.
Samsung SDI and GM agreed to sign a memorandum of understanding in Michigan on March 8 for the factory that is scheduled to start operations around 2026, according to industry sources in Seoul on Friday.
The two companies are in the final stage of talks over the investment and the plant’s 30-50 gigawatt-hour (GWh) production capacity, enough to manufacture 360,000-600,000 EVs a year. Samsung SDI plans to set up lines for prismatic and cylindrical batteries to be supplied to GM.
GM operates a battery plant in Warren, Ohio, with LG Energy Solution Ltd., the world’s No. 2 battery maker,
through their joint venture Ultium Cells LLC, which is building two more – one in Spring Hill, Tennessee and the other in Lansing Delta Township, Michigan – to manufacture a total of 145 GWh a year.The US' top automaker had initially sought to construct the fourth battery plant with LG Energy, but the South Korean battery maker was not able to participate due to a lack of staff and capacity.
Global carmakers and battery manufacturers are rushing to build production facilities in the US as Washington provides tax breaks only to EVs equipped with batteries manufactured in North America.
SIGN OF ACTIVE INVESTMENTSamsung SDI’s deal with GM indicated Samsung Group may actively invest in the battery sector for the leading South Korean conglomerate’s future growth, industry sources said.
The group’s battery unit has been relatively passive in the sector compared with its larger domestic rivals including both LG Energy and SK On Co.
Samsung SDI is building its first US battery plant in Indiana with an annual capacity of 23 GWh in a partnership with Stellantis N.V., the world’s No. 4 Dutch-domiciled multinational carmaker. Meanwhile, SK On
is running a plant in Georgia and setting up three more including two with Ford Motor Co. to annually produce a combined 150 GWh.Samsung Group leader Jay Y. Lee last month visited Samsung SDI’s plant in South Korea, emphasizing investment in talent and technology. That prompted expectations that the group will raise spending on the battery sector, especially solid-state batteries, a game changer in the global EV market, industry sources said.
“Samsung had neglected the battery sector as the group focused only on the semiconductor and bio industries, but the trend will change in the future,” said one of the sources.
Samsung SDI has already secured enough funds for active investments as the company has concentrated on profitability, which is expected to allow the company to spend more on future growth amid tougher investment conditions due to higher interest rates, industry sources said.
Write to Hyung-Kyu Kim at
khk@hankyung.com Jongwoo Cheon edited this article.
