Samsung SDI and Hyundai Motor Group have entered into an agreement for the supply of electric vehicle batteries for the first time. Following their collaboration in automotive electrical and electronics parts, including semiconductors, this expansion into the battery sector marks the broadening of their partnership, signifying the formalization of their alliance in the field of future mobility.
Samsung SDI announced on Oct. 23 that it will supply batteries for Hyundai Motor’s electric vehicles to be produced in Europe from 2026 to 2032, covering a seven-year period. The estimated battery supply during these seven years is approximately 35 to 40 gigawatt-hours (GWh), equivalent to around 500,000 electric vehicles. The estimated value of this agreement is in the range of 4 to 5 trillion won (US$2.96 to 3.7 billion).
Through this agreement, Samsung SDI will supply Hyundai Motor with its upcoming 6th generation prismatic battery, known as thr “P6,” which is currently in development. The P6 battery features a high nickel content of 91 percent in a nickel-cobalt-aluminum (NCA) cathode material arrangement and incorporates proprietary silicon materials in the anode, maximizing energy density. Production of the P6 batteries will take place at Samsung SDI’s factory in Hungary, with deliveries to Hyundai’s European manufacturing facilities.
This marks the first electric vehicle battery supply agreement between Samsung SDI and Hyundai Motor Group. Hyundai’s vehicles, including the Ioniq 5, Kia EV6, EV9, Genesis GV60, and GV70, have previously used batteries from SK on, while Hyundai’s Kona EV and Ioniq 6 have been equipped with batteries from LG Energy Solution. With this recent agreement, Hyundai Motor has now established battery supply contracts with all three major domestic battery manufacturers.
This development also signifies Hyundai’s shift from primarily using pouch-type batteries to embracing prismatic batteries, diversifying their form factors. Form factor refers to the structural design of battery packs, which can be broadly categorized into pouch, prismatic, and cylindrical shapes. Prismatic batteries, a type that Samsung SDI specializes in, are known for their durability and higher stability compared to other battery types. This is why major automakers such as Mercedes-Benz, BMW, Audi, Porsche, and Volkswagen have chosen prismatic batteries.
Samsung SDI is expected to expand its plant in Göd, Hungary, to meet the increased demand for Hyundai Motor’s battery supply. With the agreement, Samsung SDI has not only secured Hyundai Motor as a new customer but has also created opportunities for future collaboration and growth.
From Hyundai Motor’s perspective, this agreement is seen as a means to overcome the escalating trade barriers in Europe. The European Union (EU) has been formulating electric vehicle subsidy policies with similarities to the United States’ Inflation Reduction Act (IRA), aiming to protect its domestic industry and curb the growth of Chinese electric vehicles. Notably, France has decided to provide electric vehicle subsidies based on carbon emissions throughout the entire process from electric vehicle production to sales and transportation. Accordingly, Hyundai Motor is also in a situation where it has no choice but to increase local production in Europe.
The collaboration between both companies on batteries can be traced back to a meeting between Chairman Lee Jae-yong of Samsung Electronics and Chairman Chung Eui-sun of Hyundai Motor Group three years ago. Chairman Chung visited Samsung SDI’s Cheonan facility, where he and Chairman Lee toured the electric vehicle battery production site and exchanged views on potential business collaborations. Subsequently, the two companies continued their dialogue on battery-related matters, leading to the recent signing of this agreement.
Given the heightened level of cooperation between Samsung and the Hyundai Motor Group in the automotive electrical and electronics parts sector, it is anticipated that the recent battery supply agreement will further accelerate collaboration in their alliance for future vehicles. This collaboration has been gaining momentum in various areas. Samsung Display provided organic light-emitting diode (OLED) displays for the Hyundai Ioniq 5, and Samsung Electronics’ vehicle image sensors are now integrated into the Genesis GV60. Additionally, Samsung Electronics has been supplying semiconductor application processors, which play a critical role in a car’s brain functions, to Hyundai Motor. Furthermore, Samsung Electro-Mechanics has recently been directly supplying two types of cameras to Hyundai and Kia vehicles.