By Yoon Sung-won
Samsung SDI said Thursday it will invest 1 trillion won in the electric vehicle (EV) battery business this year to boost its manufacturing capabilities at home and abroad.
Because the company plans to concentrate on the mid and large secondary cell business after selling its chemical business unit, expectations are it will seek to accelerate its turnaround in this sector.
“We are considering a 974.6 billion won investment in facilities this year, mainly targeting the battery business,” said an official at Samsung SDI, Thursday. “As we have already sold the chemical business unit, the majority of facility investment will be for the secondary cell sector and batteries for EVs, among others.”
Samsung SDI is pushing to streamline its business portfolio to focus on the EV battery business. Earlier this year, it sold its chemical business unit to Lotte Chemical. The company is also planning to sell its fuel-cell battery business to Kolon Industries.
The battery maker is expected to be profitable in the small and mid-sized battery sector this year while remaining in deficit in the EV battery business until 2018. It is likely the company will seek to speed up the turnaround in the EV battery sector with more investment.
“We will invest 3 trillion won in the car battery business by 2020 to make it one of the globally best businesses in the industry,” Samsung SDI Chief Executive Cho Nam-seong said during a shareholders’ meeting earlier this year.
This year’s planned investment is a 40 percent increase on last year’s 682.2 billion won. Last year, Samsung SDI invested 528.8 billion won in the energy business, including battery manufacturing, while making a separate 153.4 billion won investment in the chemical and electronic materials sector.
Using the increased investment, Samsung SDI is expected to expand its manufacturing facilities in Ulsan and Xian, China, while establishing a new facility in Europe.
The company produces batteries for about 200,000 EVs at its Ulsan and Xian factories. The Xian factory, which is dedicated to batteries, was established with Anqing Huanxin Group in China. It started operations last October.
European countries including Hungary have been referred to as possible locations for the new battery plant.
Meanwhile, the global EV market has been on an upward swing after the massive emissions scandal involving German automobile giant Volkswagen. U.S. EV maker Tesla has also fueled the upswing by rolling out budget EV models.