Samsung SDI, Stellantis swell U.S. presence with second battery plant

Industry

Published: 24 Jul. 2023, 16:07

Samsung SDI, Stellantis swell U.S. presence with second battery plant

Choi Yoon-ho, left, CEO of Samsung SDI, and Mark Stewart, Stellantis chief operating officer for the North American region, shake hands after signing an agreement to invest $2.5 billion to build an EV battery factory in Kokomo, Indiana, in May last year. [SAMSUNG SDI]

Samsung SDI and Stellantis are building a second U.S. battery plant together, upping the ante on their bet on the rapidly growing North American market.

The Korean battery maker said Monday it has signed a memorandum of understanding with Stellantis to build their second joint U.S. battery plant, with a goal of starting mass production in 2027.

The dollar value of the investment has not been disclosed, but local media outlets estimate a maximum of 4 trillion won ($3.1 billion).

The plant will have 34 gigawatt-hours of production capacity, which is enough to power around 300,000 electric vehicles.

Details on the location of the plant will be announced at a later date, Samsung SDI said.

“By establishing the joint venture with Stellantis last year, we laid solid groundwork for making a mark around our presence in North America,” said Samsung SDI CEO Choi Yoon-ho. “The second plant will accelerate our market penetration into the [United States] and help Stellantis push the U.S. transition to an era of electric vehicles by supplying products featuring the highest levels of safety and quality.”

Samsung SDI and Stellantis set up a joint U.S. venture, StarPlus Energy, last year and are building their first joint plant, a $2.5 billion battery plant, in Kokomo, Indiana. The plant is scheduled to start operations in 2025 with 33 gigawatt-hours of capacity.

Logos of Samsung SDI and Stellantis [SAMSUNG SDI]

The latest announcement comes only a month after Samsung SDI announced a $3 billion joint plant with General Motors (GM) in New Carlisle, Indiana.

Experts say the latest joint plant marks Samsung SDI's clear determination to make investments in the North American region as part of efforts to counter the U.S. Inflation Reduction Act, which excludes EVs assembled outside of North America from tax incentives.

Unlike other battery makers in Korea, like LG Energy Solution and SK On, Samsung SDI currently has no battery-making plants in the United States. Instead, Samsung SDI has been focusing on European plants with two factories in Hungary and one in Austria.

"Aside from the GM deal, various projects are expected for Samsung SDI with other global automakers including Volvo Cars and BMW," said researcher Cho Chul-hee at Korea Investment & Securities. "SDI's production capacity will grow at an annual rate of 30 percent to reach 230 gigawatt-hours by 2026, and will eventually stand shoulder-to-shoulder with rivals LG Energy Solution, CATL and SK On."

Of the 230 gigawatt-hours of capacity, 97 will be coming from the North American region.

Samsung SDI shares rose 3.8 percent to close at 712,000 won Monday.

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