Samsung SDI seeks deals with global automakers

By Kim Yoo-chul

Samsung is betting heavily on its car battery business, with battery affiliate Samsung SDI hoping to win more sizable orders from global carmakers.

While the group’s battery business has been in some difficulty, officials say the business continues to grow as predicted and shows particularly exciting signs with new vehicles and customers expected to increase soon.

On Monday, sources “very knowledgeable” about the issue told The Korea Times that SDI was talking with BMW, Volkswagen, Porsche, Audi, Ferrari, Jaguar Land Rover (JLR) and Daimler to expand the number of batteries to be used in plugged-in hybrid electric vehicle (EV) models.

SDI’s partners are BMW and Fiat-Chrysler. BMW’s i3 EV and Fiat-Chrysler’s 500E EV models use SDI batteries, while the German carmaker’s latest i8 model will adopt SDI’s battery technology.

“SDI is talking with BMW about supplying its batteries to be used in the carmaker’s x5 Active hybrid models,” said an official, asking not to be identified.“This model is a plugged-in hybrid EV.”

Another official, requesting anonymity, said the Samsung affiliate hoped to increase its battery shipments to Volkswagen (e-Golf), Porsche (Cayenne and Panamera), Audi, Ferrari (LaFerrari such as F150) and JLR.

“Daimler’s S550 model is another model that SDI is eyeing on,” the official said.

Samsung was late in the large-sized car battery business market as the group’s affiliate has been focused on small-sized batteries to be used in Samsung Electronics’ Galaxy devices.

But as the price of EVs has fallen in key markets such as China, Europe and the United States thanks to increased subsidies by governments, Samsung, plans to boost production in Xi’an, China, and Ulsan in South Korea ahead of schedule.

Analysts and market officials say this is a part of the company’s aggressive strategy to support expectations of strong demand.

“Thanks to strong orders, losses at SDI’s medium- and large-sized battery division will be cut in coming quarters, which is helpful for the company stocks,” said HI Investment analyst Chung Won-seok. He said additional good news about large batteries would be the key catalyst for the stock.

KTB Investment’s Kim Yang-jae said SDI’s approaches to global carmakers might bring “sizable returns” because many original equipment manufacturers (OEMs) were strongly interested in partners who could supply on a “pack” basis as opposed to a cell basis.

A Samsung SDI official said the company cannot comment on customer issues.