The Samsung and Hyundai Motor groups, the two largest business groups in South Korea, are expected to cooperate in the electric vehicle (EV) market. Lee Jae-young and Chung Eui-sun, the young leaders of the two groups, are already acquainted with each other.
According to industry sources on October 22, Hyundai is considering working with Samsung SDI for EV battery development. Samsung SDI is one of the four largest non-Chinese EV battery manufacturers in the world, but it has not supplied EV batteries to Korean carmakers. At present, Hyundai Motor Company and Kia Motors are using batteries supplied by LG Chem and SK Innovation. The two automakers have sought to expand their partnership with EV battery producers to be better prepared for possible supply setbacks.
If the collaboration between the two groups becomes reality, it will be a notable event as they have seldom worked together. Samsung is the global number one in a number of IT industry sectors such as small lithium-ion battery and memory semiconductors while Hyundai is one of the five biggest automakers in the world.
The relationship between the two groups became awkward back in 1995, when Samsung entered the automobile market. Their business cooperation has been close to zero since that year.
According to many experts, however, their collaboration in the EV and self-driving car markets is highly likely, given the rapport between the young heads of the groups.
The cooperation becomes even more likely given that the two young leaders are striving to create new business opportunities. Hyundai is aiming to increase the number of its EV models to at least 14 by 2025 to become the third-largest player in the global EV market. Samsung Electronics is focusing on automotive electronics as a future growth opportunity as seen in its recent acquisition of Harman International for $8 billion.
These days, memory semiconductor prices are falling and competition in the global smartphone market is getting more and more intense, which means Samsung is in need of other growth drivers. Besides, Hyundai’s global market share is on the decrease along with its sales due to intensifying competition and trade protectionism.
Although their direct business cooperation is yet to come, the two groups have, in fact, taken some strategic moves together. The examples include their joint investment in Solid Power, an American battery manufacturer, and self-driving car research they conducted with SK Telecom.
“A large number of rival companies across the world are becoming partners in today’s Industry 4.0 era,” said an expert, adding, “A partnership of Samsung and Hyundai in the future car market will be stronger than those of Google and GM.”