Korean battery makers diversify partners for joint ventures in US

Samsung SDI CEO Choi Yoon-ho, left, and General Motors CEO Mary Barra / Courtesy of each company

Samsung SDI to build battery plant with GM

By Park Jae-hyuk

Samsung SDI is set to establish a joint venture with General Motors, joining the latest trend of Korean electric vehicle (EV) battery makers diversifying their partnerships with global carmakers, according to industry officials, Sunday.

The battery manufacturing unit of Samsung Group will reportedly sign a memorandum of understanding with the U.S. carmaker in the state of Michigan on Wednesday, in order to build a joint battery plant. Samsung SDI CEO Choi Yoon-ho and GM CEO Mary Barra are expected to attend the signing ceremony.

Until last year, GM was considering building a fourth EV battery plant in Indiana with LG Energy Solution (LGES), as the two companies had been operating their joint venture named Ultium Cells.

LGES, however, remained skeptical about the plan due to the uncertain macroeconomic outlook and a conflict with the U.S. carmaker over how to respond to a unionization drive by workers at Ultium Cells' Ohio factory. As a result, GM started looking for another partner for the project, sparking speculation that Samsung SDI may replace LGES for the construction of GM's fourth EV battery plant.

During January's conference call on its fourth-quarter earnings, Samsung SDI also indicated its intention to set up another joint venture with a U.S. carmaker, following one it established in collaboration with Stellantis. In response to questions about the potential new joint venture, the Korean EV battery maker said it was in talks with its multiple customer companies regarding this issue.

“There have been more opportunities for carmakers and battery manufacturers targeting the U.S. market, and our company has also seized plenty of opportunities under the circumstances,” Samsung SDI Executive Vice President Michael Son said at the time.

LGES, on the other hand, started the construction of a joint battery plant in Ohio with Japan's Honda Motor, while joining hands with Ford Motor to set up a joint venture in Turkey.

Ford had initially sought to establish a Turkey joint venture with SK On, as the two companies have been running their U.S. joint venture named BlueOval SK. Their efforts to set up a new one in Turkey, however, could not bear fruit for unknown reasons. In addition, Ford announced last month that it will build a lithium iron phosphate (LFP) battery plant in Michigan by licensing technologies from China's CATL, which has the world's largest market share.

Although SK On and Ford reaffirmed their strong ties last Friday by inviting U.S. Secretary of Transportation Pete Buttigieg to the construction site of BlueOval SK's Kentucky battery plant, SK On will also build a joint battery plant in Georgia with Hyundai Motor Group.

“Korean battery makers and U.S. carmakers had maintained exclusive partnerships in the past, but diversified demand for batteries for different types of cars and various regions made it difficult for a certain battery maker to completely satisfy the demands of a certain carmaker,” Samsung Securities analyst Chang Jung-hoon said.