Samsung SDI Promoting Joint Ventures with GM and Volvo

Samsung SDI is pushing for joint venture electric vehicle battery plants in the United States with two global automakers. 

The total cost of the two joint venture projects is estimated at US$8 billion, with Samsung SDI expected to invest US$4bn. This large investment plan suggests a change in Samsung Group's conservative attitude toward the EV battery business, analysts say. The change was prompted by an increase in demand for Korean batteries in the United States and an improvement in Samsung SDI's business performance, they added.

Samsung SDI is promoting joint ventures with General Motors (GM) and Volvo, a Swedish car brand taken over by Geely Motors of China. The company is expected to announce the joint venture with GM this month. The two companies plan to build a plant with an annual production capacity of about 50GWh, which is enough to power about 670,000 electric vehicles with a driving range of 500 km. To this end, Samsung SDI and GM will each invest about US$2 billion.

This partnership was first proposed by GM. In particular, this joint venture is expected to offer a glance of GM's next-generation battery strategy. GM has thus far received pouch-type batteries from LG Energy Solution. Samsung SDI does not make this type of battery. It is focusing on prismatic and cylindrical batteries. This may signal a change in GM's battery form factor strategy. The types of batteries to be produced at the joint plant have not yet been confirmed. However, industry insiders speculate that the plant will roll out prismatic batteries. GM officials who visited Korea in June reportedly showed a great interest in the production process for prismatic batteries.

Samsung SDI is promoting the establishment of a separate joint venture with Volvo, which is expected to be announced in December. The size of the joint venture is similar to that of the Samsung-GM joint venture. The two companies will each invest about $2 billion in the joint plant to produce 50GWh of batteries a year. Volvo is pursuing its complete transition to an EV brand by 2030. Although Volvo has China's Geely as its parent company, the United States is a market that it must enter. 

Volvo is known to adopt cylindrical batteries in the future. It used prismatic batteries for the EX90. Samsung SDI produces both type of batteries, making it Volvo's optimal battery partner in the U.S. electric vehicle market.

Now Samsung SDI will have three major global automakers –- GM, Volvo and Stellantis -- as partners.