Samsung SDI wins $95 mn EU aid for Hungary battery plant

Samsung SDI Co. has secured €89.6 million ($95 million) in subsidies from the European Union for its first electric vehicle battery plant in Hungary. 

The European Commission said on Tuesday that the investment aid would support Samsung's expansion of the battery cell production facility in the European country.

It will contribute to the development of the region and to job creation, the EU's executive body said in a press release.

In 2017, Samsung SDI decided to invest €1.2 billion to build its first battery cell factory in Göd, Hungary. The plant was completed in 2019.

It reached full production capacity in January 2022, supplying more than 6 million battery cells per month to EV makers, mainly in Europe. 

Additionally, the world’s No. 6 EV battery maker is expected to win additional subsidies for its second plant in Hungary, which has been up and running since the start of this year.

Samsung has not yet disclosed the production capacity of the second factory, but industry watchers estimate it at 50 Gigawatt hours (GWh) per year. That would be enough to produce 600,000 high-performance EVs a year.

The company manufactures prismatic cells in the two Hungarian plants. They are supplied to European EV makers such as BMW, Volkswagen and Stellantis. 

As the demand for EV batteries is growing, market speculation is that Samsung SDI might build a plant in North America, after it signed a 40 trillion won ($33 billion) cathode supply deal with POSCO Chemical Co. in January.

It is the largest-ever battery material deal for Samsung SDI. Cathode is a key ingredient of battery materials.
 
Its rival SK On Co. operates three battery plants in Hungary with a combined annual capacity of 47.5 GWh. It is highly likely to receive a similar level of EU subsidies as that expected for Samsung's second factory there.

Write to Hyung-Kyu Kim at khk@hankyung.com

Yeonhee Kim edited this article