Hyundai Motor, Samsung SDI forming battery partnership
Samsung SDI's booth at the International Electric Vehicle Expo, held on Jeju Island in 2016 / Courtesy of Samsung SDI
By Kim Bo-eun
Hyundai Motor is seeking to build a partnership with Samsung, at this time when the carmaker is pushing forward with its shift to eco-friendly future vehicles. The partnership is focused on developing each company's strategic interests: Hyundai Motor is in need of EV batteries and automotive components, while Samsung is able to provide them.
Samsung's battery-making unit is developing a cylindrical battery to be used in Hyundai's new hybrid vehicle models. Samsung SDI has not yet supplied EV batteries to Hyundai Motor. SK Innovation, LG Energy Solution and China's CATL have supplied the batteries for Hyundai's E-GMP EV platform.
Samsung SDI has so far focused on prismatic batteries, while Hyundai sought to use pouch-type batteries which are mainly produced by SK and LG's battery affiliates. But Hyundai is seen to be seeking cylindrical batteries for its hybrid vehicle, due to their stability and lower production costs.
Cylindrical batteries are known to be more stable and cost less to produce, as they have been used for longer than the pouch-type and prismatic types. Cylindrical batteries, conventionally of small size, were previously used for electronic devices, but are now being employed in EVs as well, after Tesla's adoption of the type for its vehicles.
The battery to be developed is known to be of a larger size than conventional cylindrical batteries, to boost energy capacity.
Samsung's battery affiliate already produces cylindrical batteries for power tools. Industry views are that given its existing production of cylindrical batteries, it will not be difficult for Samsung SDI to develop cylindrical batteries for EVs.
A Hyundai Motor official said that he could not confirm Samsung SDI's planned supply of cylindrical batteries, given the “the battery is currently under development.” He said, “Regarding eco-friendly vehicles, we are working with many battery makers.”
Samsung SDI said that it could not comment on client-related matters. An industry official said, "It appears possible that Hyundai is seeking to diversify its vendors further, as a means to secure supply."
Such developments came after the chiefs of the two conglomerates met over several occasions last year. Hyundai Motor Chairman Chung Eui-sun met with Samsung Electronics Vice Chairman Lee Jae-yong at Samsung SDI's plant in Cheonan, South Chungcheong Province, in May and at Hyundai Motor's research lab in Hwaseong, Gyeonggi Province, in July. The meetings sparked speculation that the conglomerates would join hands not only for EV batteries, but also for display panels and other components.
"Based on the premise that Samsung SDI is now supplying EV batteries to Hyundai Motor, according to their collaboration, there are expectations for further expansion of their partnership related to batteries," KB Securities analyst Lee Chang-min stated, Tuesday.
"It is predicted that, if the partnership leads to Samsung SDI supplying its prismatic batteries, which are the company's main product, the battery maker will see greater benefits."
Samsung SDI's share price closed at 690,000 won, Tuesday, a 5.34 percent rise from the previous day's close.
The rise is also attributed to news of the battery maker's supply to U.S. EV startup Rivian, which was unveiled Monday. The company, backed by investments from Amazon and Ford, is considered Tesla's rival. Samsung SDI's batteries are set to be loaded into Rivian's EVs, such as pickup trucks and SUVs to be launched later this year.