Samsung SDI Co., the world’s sixth-largest battery maker, and General Motors Co., the top U.S. automaker, plan to build a $3.5 billion cell factory in the world’s third-largest electric vehicle market, saying they expect demand for environmentally friendly cars to grow in the long term despite the recent slowdown.
Samsung SDI announced Wednesday that it has agreed with GM to build a battery factory in New Carlisle, Indiana, starting in 2027 that will produce 27 gigawatt hours (GWh) per year, enough for about 350,000 electric vehicles. According to the South Korean battery maker, the two companies are expected to increase annual capacity to 36 GWh.
The manufacturer said it plans to invest 2.3 trillion won ($1.7 billion) by March 2028 to secure a 50.01 percent stake in the joint venture factory.
In March 2023, Samsung SDI and GM signed a memorandum of understanding for the plant with the goal of starting mass production in 2026.
“Building on last year’s partnership with GM, North America’s leading automaker, we have established a premium battery production center to lead the U.S. electric vehicle market,” said Choi Yoon-ho, CEO of Samsung SDI.
The company is in talks with the maker of the Cadillac Lyriq electric SUV to produce 46-millimeter-diameter cylindrical batteries at the new facility.
LONG-TERM GROWTH
Their final agreement came as the electric vehicle and battery industry worldwide grapples with the ongoing slowdown in the clean vehicle sector.
However, GM CEO Mary Barra expressed optimism about the EV sector.
“The Samsung SDI joint venture is the latest example of GM’s commitment to driving innovation in America,” Barra said in a statement from Samsung SDI.
“The electric vehicle market and GM’s revenues will continue to grow as more customers try our electric vehicles, charging infrastructure expands and we expand into additional segments.”
Samsung SDI and GM have closely monitored the rapidly changing market conditions and decided to invest in the joint venture to keep pace with market developments, the statement said.
FOR UPCOMING GM ELECTRIC MODELS
The new plant will produce high-performance, nickel-rich nickel-cobalt-aluminum (NCA)-based prismatic batteries that are expected to be used in GM’s upcoming electric vehicles, Samsung SDI said.
Its prismatic batteries not only improved range through their high energy density, but also increased safety through their metal casing and venting system, the company said.
“Through the joint venture with GM, Samsung SDI will gain a foothold in the North American electric vehicle market and strive to attract more customers for its high-quality prismatic batteries with guaranteed safety,” Samsung SDI said.
The company is already building a battery factory in Indiana with Netherlands-based multinational automaker Stellantis NV, the world’s fourth-largest automaker, and has agreed to build another in the United States.
Write to Hyung-Kyu Kim at [email protected]
Jongwoo Cheon edited this article.
