Shifting Alliances
Global automakers and battery companies are forging alliances and partnerships one after another. Following Ford’s decision to partner with LG Energy Solution instead of SK Energy in Turkey, General Motors (GM) has decided to build a joint venture plant with Samsung SDI instead of LG Energy Solution.
Samsung SDI will sign a business agreement with GM to establish a joint venture plant in the state of Michigan in the United States with Samsung SDI President Choi Yoon-ho and GM CEO Mary Barra in attendance on March 8 (local time). The plant will have an annual production capacity of 50 GWh and will reportedly cost up to 5 trillion won.
This marked the second time Samsung SDI announced its plan to build a joint venture with an automaker in North America, following the first one with Stellantis in April 2022. Until now, Samsung SDI has been conservative in establishing partnerships compared to other companies. Samsung SDI has begun to actively penetrate the North American market thanks to the IRA, analysts say.
GM has forged a new partnership with Samsung SDI instead of LG Energy Solution. This reflects the complexity of automaker-battery maker relationships. Until now, GM has maintained an exclusive partnership with LG Energy Solution by establishing a joint venture, Ultimate Cells. GM’s new partnership with Samsung SDI shows that GM is beginning to diversify its cooperation.
GM has three joint venture plants in operation or under construction with LG Energy Solution. The US carmaker discussed the creation of a fourth joint venture plant with LG Energy Solution but failed to make a deal. Instead, LG forged a partnership with Ford.
These moves were made based on automakers’ efforts to stabilize and diversify battery supply, analysts say. GM, which currently uses pouch batteries from Ultimate Cells among others in its EVs, decided to partner with Samsung SDI to secure cylindrical and prismatic batteries in addition to pouch batteries, analysts say.
Samsung SDI manufactures prismatic and cylindrical batteries. “One of the strengths of the GM platform is the ability to use pouch, prismatic and cylindrical battery cells,” Barra said in an earnings conference call, hinting at the possibility of GM using cylindrical batteries.