Samsung SDI and General Motors to spend $3 billion to build EV battery plant in the US
Samsung SDI and General Motors said on Tuesday that they will spend over $3 billion together to build an electric vehicle battery plant in the United States.
The pair haven't finalized the location of their joint venture but are aiming for an annual production capacity of 30 GWh, with commercial production beginning in 2026. The plant will produce high-nickel prismatic and cylinder batteries that will be used by General Motors in its electric vehicles.
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The deal is the South Korean battery maker's first supply partnership with the US car giant and the plant will be its second in the US with a car maker. Samsung SDI last year announced a similar joint venture with Stellantis to spend $2.5 billion to build an electric vehicle battery plant in Kokomo, Indiana.
Meanwhile, General Motors already runs an electric vehicle battery joint venture called Ultium Cells with another South Korean battery maker, LG Energy Solution, which is building a battery plant in Michigan --one out of a planned three. That partnership was tested in 2021 after the large-scale recall of Bolt EVs from battery fires: LG Chem, the parent company of LG Energy Solution, and LG Electronics agreed to shoulder $1.2 billion out of the $2 billion in cost incurred by General Motors from the recall.
South Korean battery makers have been seeking to build battery plants in the US since the signing last year of the US Inflation Reduction Act that offers subsidies to local manufacturing companies.
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Samsung SDI's partnership with General Motors also signals that the South Korean battery maker is planning to expand its footprint in the electric vehicle battery space. While it is a large producer of lithium-ion batteries used in smartphones and a key supplier to Samsung Electronics and an energy storage system supplier to Tesla, Samsung SDI has been the smallest spender in electric vehicle batteries among the three battery makers in South Korea. The others are LG Energy Solution and SK On.
Samsung SDI's announcement also comes as South Korean President Yoon Suk-yeol is making his state visit to the US to meet President Joe Biden. Yoon, during his week-long visit, is accompanied by a business delegation that includes Samsung Electronics executive chairman Jay Y Lee, the head of the entire Samsung Group.
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Lee's US visit with the South Korean President could mean the announcement of more electric vehicle battery partnerships. The Samsung chairman is also likely to seek clarification on the subsidies offered by the US Chip Act that aims to boost domestic computer chip production. Samsung has multiple chip production facilities, or fabs, both in the US and China.
The South Korean tech giant's latest fab in the US is being built in Taylor, Texas for $17 billion and is expected to begin production next year. Samsung Electro-Mechanics, Samsung's component maker, supplies image sensors to Tesla for cameras used in cars. Samsung Display supplies display panels used in infotainment screens of various car brands.