Lotte Energy to supply copper foil to Samsung SDI-Stellantis JV

Samsung SDI Co., South Korea’s third-largest battery maker by battery usage, has picked Lotte Energy Materials Corp. as the exclusive supplier of copper foil for its first battery plant in the US. The site is being built in partnership with Netherlands-based automaker Stellantis N.V.

According to the battery industry on Monday, the Samsung SDI-Stellantis joint venture, dubbed StarPlus Energy (SPE), has decided to use Lotte Energy's copper foil, a key material in lithium-ion batteries.

Korea’s major copper foil producer, formerly Iljin Materials Co., was the only copper foil supplier to have passed SPE’s quality test, which normally takes a year, said industry sources.

Copper foil, also known as elecfoil, is a thin foil that surrounds the negative end of a lithium-ion battery called the anode. High-strength copper foils are essential to making safer, high-density rechargeable batteries.

Considering that the Samsung SDI-Stellantis JV plans to move up the launch of its first US battery plant to later this year, Lotte Energy is expected to enjoy a recovery in earnings later this year despite the ongoing EV slowdown.

The first plant was originally planned to open in early 2025. But the battery JV has decided to open it earlier because it aims to secure US government subsidies under the Inflation Reduction Act, which favors EVs and batteries produced in North America, earlier than expected.

The first plant is now undergoing test operation.

The JV plans to start operating its second battery plant with an annual capacity of 34 GWh in the US by 2027. It is building two US plants in Indiana. 

FAST RECOVERY IN EARNINGS

The EV industry is now crossing the chasm between early adopters and mass market consumers, which is causing the market slowdown.

Samsung SDI reported poor earnings in the second quarter due to stalled EV sales by its key customers in Europe: BMW, Volkswagen and Audi.

This has battered the battery and battery materials industries, which relied heavily on the EV industry for its recent growth. Lotte Energy is one such company taking a hit from the prolonged EV slowdown.

With its exclusive supply of copper foil to the Samsung SDI-Stellantis JV, which could begin later this year, Lotte Energy is expected to fight back the EV slowdown.

The key to its recovery, however, hinges on the utilization rate of the new battery plant in the US.

A battery maker needs 500 to 600 tons of copper foil to produce 1 GWh worth of batteries.

If the first Samsung SDI-Stellantis JV plant with a 33 GWh capacity operates at full capacity, it could need 16,500 to 19,800 tons of copper foil.

“If US EV demand recovers next year, the battery plant’s utilization rate will also rebound, which is expected to help Lotte Energy Materials rake in more than 1 trillion won ($754.4 million) in sales,” said a battery industry official.

Industry observers estimate that Lotte Energy could reap 100 billion to 300 billion won in copper foil sales to SPE annually, depending on the JV plant's utilization rate.

The copper foil supplier reported 809 billion won in sales for 2023.

To benefit from the US subsidies, Lotte Energy is also seeking to build a copper foil plant in the US. It has filed for US government approval to build a copper foil plant in the state of Delaware.

Lotte Energy shares on Monday fell 2.4% to close at 36,100 won.

Write to Sang Hoon Sung at uphoon@hankyung.com
Sookyung Seo edited this article.