Samsung SDI may build battery plant in U.S. with General Motors

Industry

Published: 05 Mar. 2023, 14:41 Updated: 05 Mar. 2023, 18:26

Samsung SDI may build battery plant in U.S. with General Motors

Samsung SDI CEO Choi Yoon-ho speaks during a meeting with his employees at the headquarters in Yongin, Gyeonggi, in April. [SAMSUNG SDI]

Samsung SDI may build a 5-trillion-won ($3.9-billion) battery plant in the United States with General Motors, according to local reports.

The CEOs of the two companies are expected to sign a memorandum of understanding (MOU) on March 8 in Michigan, the reports said, though Samsung SDI declined to comment.

"We are in discussion with multiple automakers, but we can't give details on anything at the moment," a Samsung SDI spokesperson said.

The facility is reported to have up to 50 gigawatt hours of annual production capacity once it is built, enough to manufacture 600,000 EVs.

Samsung SDI will likely produce prismatic- and cylindrical-type batteries at the factory.

The two are still negotiating details such as location, investment size and capacity, the reports added.

It will be the Korean battery maker's second battery-making plant in the United States. Samsung SDI is currently building a $2.5 billion battery plant in Kokomo, Indiana, with Stellantis.

Until now, General Motors has long been maintaining its partnership with LG Energy Solution, Korea's largest battery maker.

Samsung SDI's electric car batteries [SAMSUNG SDI]

General Motors and LG Energy Solution currently have three battery plants either running or under constructing in the United States, and General Motors CEO Mary Barra said last year the two are in talks for the fourth factory.

The Wall Street Journal reported earlier in the year that the fourth General Motors-LG factory was scratched in part because "LG Energy executives in Korea were hesitant to commit to the project."

The partnership also comes as part of Samsung SDI's efforts to expand its footprint in North America as the U.S. government's Inflation Reduction Act (IRA) restricts the origin of battery minerals and components that can be used in order to be eligible for up to a $7,500 subsidiary for EVs assembled locally.

Specifics about the battery component rules will be issued in March by the U.S. Treasury Department.

Samsung SDI had 4.7 percent of the global battery market last year, making it the sixth largest battery maker in the world, according to data from SNE Research.

Samsung Electronics Chairman Lee Jae-yong on Feb. 27 visited Samsung SDI's R&D center in Suwon, Gyeonggi, for the first time since being named chief. Samsung Electronics is the largest stakeholder of Samsung SDI with 19.6 percent.

BY SARAH CHEA [chea.sarah@joongang.co.kr]