GM and Samsung SDI finalises deal to build $3.5 billion joint EV battery factory

GM and Samsung deal: Samsung SDI, a South Korean appliance manufacturer said on Wednesday, that it has completed an agreement with General Motors to build a joint electric vehicle (EV) battery factory in the US state of Indiana.

As per this partnership between the two companies, Samsung SDI and General Motors will be investing about $3.5 billion to build a battery cell manufacturing plant for electric vehicles. This battery cell manufacturing facility will be having an annual production capacity of 27-gigawatt hours (GWh) initially.

The shares of Samsung SDI saw an upsurge. The shares rose as much as 3.2 per cent in morning trade, versus benchmark KOSPI's KS.11 0.3 per cent fall.

The plan for this partnership between Samsung SDI and General Motors was first announced in April 2023. GM and Samsung SDI had said the joint venture would cost more than $3 billion, with a planned production capacity of 30 GWh. The operations at this battery cell manufacturing facility will begin in 2026.

The South Korean battery maker said that the joint plant with General Motors aims for mass production in 2027. The annual capacity is expected to potentially rise to 36 GWh under expansion plans.

Kurt Kelty, GM Vice President of battery cell and pack, said that he had joined Samsung SDI's CEO to finalise the agreement on the battery joint venture.

Kelty said the plant will have the "Capability to expand up to 36 GWh, building prismatic cells, which will be added to our battery technology portfolio, helping us to continue to increase performance and lower costs in the future."

Last year, General Motors said it expected the Indiana plant would have production lines to build both nickel-rich prismatic and cylindrical cells.

In June, GM reduced its yearly EV production target as the firm relies on demand for its gasoline-powered vehicles. GM expected the higher end of their 2024 EV production to be 250,000 vehicles, down from a previous prediction of 300,000 units.

(with Reuters inputs)