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Samsung says carmakers cannot internalize entire battery technology

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Samsung SDI's booth at the International Electric Vehicle Expo, held on Jeju Island in 2016 / Courtesy of Samsung SDI
Samsung SDI's booth at the International Electric Vehicle Expo, held on Jeju Island in 2016 / Courtesy of Samsung SDI

By Kim Bo-eun

Carmakers will need to continue working with battery suppliers for electric vehicles (EV), Samsung SDI said Tuesday, given the "explosive" demand for EV batteries and the time it takes to secure technology and production capacity at a large scale.

The Samsung affiliate's assessment came after leading EV manufacturers including Tesla and Volkswagen unveiled plans to internalize battery supply as a means to stabilize sourcing.

"EV battery production requires long periods of tech development and mass production capability and knowhow. Carmakers will go through trial and error and it will take time to internalize battery capacity at a large scale," Samsung SDI's Vice President Kim Jong-sung said in an earnings conference call upon announcing its first-quarter results.

"Car manufacturers with large EV capacities will have difficulty internalizing total battery demand. It will be inevitable for them to maintain relationships with battery suppliers to source different batteries needed for their models."

The Samsung unit also said its prismatic battery is superior in terms of safety, cell capacity, simplified components and space efficiency. Volkswagen said last month it would adopt a new unified prismatic battery. Prismatic batteries account for the majority of Samsung SDI's EV batteries.

"By using the stronger prismatic cell, fewer components can be used at the module or pack level and higher energy density is achieved which fits very well with the carmakers trying to simplify their modules and packs," Samsung SDI Senior Vice President Michael Son said.

During the call, Samsung SDI said it is also preparing for mass production of cylindrical batteries after clinching a supply deal with U.S. EV startup Rivian.

"Our cylindrical battery business continues to prepare EV projects with many customers including Rivian," Samsung SDI director Song Yoo-jin said. "We expect to see meaningful expansion starting from mass production this year and continuing to next year."

He said EV project contribution within Samsung SDI's cylindrical battery revenue is expected to be a single digit this year, but to grow to double digits next year.

Samsung SDI posted 2.96 trillion won in sales in the first quarter, up 23.6 percent year-on-year. Operating profit also grew 146.7 percent year-on-year to 133.2 billion won. On a quarterly basis, sales and operating profit each fell 8.9 percent and 45.9 percent, due to the first quarter being seasonally slow, the company said.

But the call did not mention the specifics regarding the possibility of building additional overseas plants. Samsung SDI is expected to build a new battery manufacturing line in the United States. The company operates a battery pack manufacturing plant in the U.S. state of Michigan, but no manufacturing facilities in the mainland U.S. manufacture battery cells. Samsung SDI holds the fifth-largest share in the global market for EV batteries.


Kim Bo-eun bkim@koreatimes.co.kr


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