By Kim Yoo-chul
Staff Reporter

SB LiMotive, a 50:50 joint venture between Samsung SDI and Bosch of Germany, has struck a 10-year exclusive lithium-ion battery deal with Delphi of the United States.

Under the partnership, SB LiMotive will supply batteries to the American company from 2012 through 2021, Samsung SDI spokesman Seo Hae-su said Tuesday.

Delphi, which emerged from a four-year bankruptcy in October, will use the batteries in its propulsion systems for hybrid commercial trucks and buses, the official said.

"Based on a mutual agreement, Samsung SDI wouldn't comment on the contract value and other financial details," Seo said.

SB LiMotive will start production of hybrid and pure electric vehicle batteries in 2011 at a plant under construction in Ulsan, South Korea.

The joint venture is planning to provide technical support and after-sales services via the U.S. battery maker Cobasys, Seo said.

The venture recently acquired Cobasys in an effort to strengthen its North American market presence.

"Battery technology owned by SDI and Bosch's marketing power have finally paid off," the spokesman added.

Integration of lithium-ion battery cells in a car requires higher standards in terms of durability, operational stability and safety.

Reports said Indianapolis-based Allison Transmission Inc. has entered into a long-term agreement to have the Michigan-based Delphi Automotive Systems Inc. supply it with hybrid drive-system components and energy-storage systems.

The latest deal came at a time when global carmakers are preparing for growing demand for electric vehicles.

North American, European and even Asian carmakers have signed agreements with Asian battery makers including SB LiMotive and LG Chem in preparation for the growth in demand for petrol-electric hybrid and plug-in vehicles.

The links range from joint development work and supply contracts to joint ventures to make batteries.

"Automakers with no joint venture have a slight disadvantage in terms of getting favorable component prices as well as a lack of access to the latest and greatest technology," J.D. Power and Associates, a U.S.-based research firm, said.

The initial market for electric vehicles is currently largely dependent on government subsidies and incentives.

Auto analysts say significant reductions in battery cost are seen as a requirement for the industry to grow to nearly $8 billion by 2015.

yckim@koreatimes.co.kr