Samsung SDI to invest $2 bn to build 2nd US battery plant with Stellantis

Samsung SDI Co. will inject $1.98 billion to build a second battery manufacturing plant in the US jointly with Netherlands-based automaker Stellantis N.V., South Korea’s third-largest electric vehicle battery maker announced on Wednesday.

The investment means Samsung SDI will own a 51% stake in the new factory, the Korean partner added in a regulatory filing in Seoul.  

Samsung SDI and Stellantis in July agreed to add the battery plant with an annual production capacity of 34 gigawatt hours (GWh) in the US, where they are now building the first one after setting up US joint venture StarPlus Energy in October 2021.

They have not decided the location for the second battery plant but are expected to build it near their first plant in Kokomo, Indiana, according to sources.

They plan to break ground on the second US factory in April 2024 to commence its mass production in November 2027.

Once the second battery plant is up and running, the JV’s total battery production capacity per year in the US will reach 67 GWh, enough to power more than 1 million electric vehicles.

The two companies have agreed to up the total capacity of the first battery-making facility to 33 GWh from 23 GWh. The first plant, the construction of which began last year, is expected to start commercial production in the first quarter of 2025.

Stellantis, the world’s No. 4 carmaker created via a merger between the Italian-American conglomerate Fiat Chrysler Automobiles and the French PSA Group, aims to offer at least 25 models of new battery-powered EVs for the North American market by the end of the decade.

IN RESPONSE TO IRA

The smallest of Korea’s top three EV battery makers has been seeking to foray into the US EV battery market through partnerships with finished carmakers.

Samsung SDI in June announced that it agreed to build an EV battery plant with General Motors Co. (GM) in New Carlisle, Indiana, with a target of operation from 2026.

They aim to produce more than 30 GWh of batteries a year from the plant, enough for more than 350,000 EVs.

In April they agreed to set up a JV to manufacture nickel-rich prismatic and cylindrical batteries in the US, with a total investment of $3 billion.

Samsung SDI has joined its bigger crosstown rivals, LG Energy Solution Ltd. and SK On Co., in a race to build battery plants on American soil in response to the US Inflation Reduction Act (IRA), which grants up to $7,500 in tax credits to buyers of EVs assembled in North America.

To qualify for the credit, 40% of the critical-mineral value of the vehicle’s battery must come from the US or countries having free trade agreements with the world’s No. 1 economy.

North America is the world's third-largest EV market after China and Europe. 

Write to Sungsu Bae at baebae@hankyung.com


Sookyung Seo edited this article.