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| Samsung Electronics Vice Chairman Lee Jae-yong, left, and Hyundai Motor Group Executive Vice Chairman Chung Euisun |
By Nam Hyun-woo
Samsung Electronics Vice Chairman Lee Jae-yong and Hyundai Motor Group Executive Vice Chairman Chung Euisun had a rare face-to-face meeting on the sidelines of the latter's visit to a Samsung battery production facility south of Seoul.
Representatives from both conglomerates downplayed the significance of the encounter with an official at Hyundai Motor saying the meeting wasn't aimed at "a certain deal or business," and was used as an opportunity to "share opinions and thoughts" on business issues affecting the companies.
Samsung and Hyundai Motor had been expected to announce a non-binding memorandum of understanding (MOU) regarding a battery supply deal; and the meeting clearly dropped hints of "potential cooperation" between the two on electric vehicles (EV), according to people knowledgeable of the matter.
The meeting came a few days after Lee apologized for his alleged role in a move to cement his succession to de facto head of the Samsung Group that resulted in a bribery conviction. In a nationally-televised apology, Lee promised not to pass on management control of Samsung to his children, and to focus on businesses that Samsung can "do well." EV batteries are predicted to be one of Samsung's next revenue generators. President Moon Jae-in also identified this sector as a new growth engine for the country as a whole.
Regarding the specifics of the meeting and Chung's visit, officials said he inspected Samsung SDI's plant in Cheonan, South Chungcheong Province, and had a closed door meeting with Lee to discuss solid-state batteries that the Samsung unit is developing. Solid-state batteries are often described as "next generation" as they are potentially safer and have higher energy densities.
The two tycoons have met several times at official events, but this is the first time they have discussed business together.
An official at Hyundai Motor Group said, "Chung visited the Samsung SDI plant to share his opinion on the technological direction of solid-state batteries and receive updates on cutting-edge technologies."
Samsung also said the leaders were briefed about global trends in solid-state batteries and Samsung SDI's current status in developing them.
Though the conglomerates refrained from commenting further on the meeting, industry officials said it could be interpreted as the development of a partnership, given the leaders "wouldn't be meeting in person just to talk about batteries."
"The meeting is drawing interest because Chung it shows that Hyundai Motor can partner with anyone in advanced technologies," an automobile industry official said.
Samsung and Hyundai Motor Group have collaborated before, but distanced themselves in the recent past due to their portfolios overlapping past. Samsung attempted a foray into the automobile business with Samsung Motors ― now Renault Samsung Motors ― in the 1990s; while Hyundai Group, which spun off into multiple groups, including Hyundai Motor Group, also had electronics units at the time.
Hyundai Motor is currently procuring batteries for its EVs from LG Chem, while its affiliate Kia Motors is supplied by SK Innovation. Hyundai Motor Group's affiliate Hyundai Mobis and LG Chem have a 51:49 joint venture on EV batteries, HL Green Power, which saw 1.2 trillion won in sales last year, up from 757.7 billion won in 2018.
The group also selected SK Innovation as its first-tier supplier for an EV that will debut next year. SK will supply batteries for 500,000 vehicles over the next five years in the 10 trillion won deal.
In March, this year, Samsung Electronics said it had developed solid-state battery technology that would allow an EV to travel 800 kilometers on a single charge. This is expected to be the standard for Samsung SDI's solid-state batteries. LG Chem and SK Innovation also said they are on track to develop solid-state batteries.
If Samsung SDI supplies batteries for Hyundai and Kia EVs, its market share will get a significant boost. According to market tracker SNE Research, Samsung SDI was the world's No. 4 EV battery supplier in the first quarter of 2020, with a 6 percent market share. LG Chem led the pack with 27.1 percent, followed by Panasonic at 25.7 percent and CATL, 17.4 percent.
