SEOUL/MILAN (Reuters) -Stellantis and South Korea’s Samsung SDI Co Ltd have entered a preliminary agreement on a joint venture to produce electric vehicle (EV) battery cells and modules in the United States, the two companies said on Friday.
The tie-up comes less than a week after the world’s fourth largest automaker signed a similar agreement https://www.reuters.com/technology/stellantis-lg-energy-form-battery-production-jv-2021-10-18 with South Korea’s LG Energy Solution (LGES), as it rolls out its 30 billion euro ($35 billion) electrification plan.
Automakers are investing billions of dollars to accelerate a transition to low-emission mobility and prepare for a progressive phase-out of internal combustion engines.
Stellantis, which was formed in January via the merger https://www.reuters.com/article/us-stellantis-deal-idUSKBN29L001 of Italian-American automaker Fiat Chrysler and France’s PSA, earlier this year announced it would invest more than 30 billion euros through 2025 on electrifying its vehicle line-up.
The two battery deals will support its goal to have EVs account for over 40% of its U.S. sales by 2030, providing an annual battery production capacity of up to 80 gigawatt hours (GWh), which could power about 1.2 million electric vehicles.
Martino De Ambroggi, an analyst at broker Equita, said the joint ventures with Samsung SDI and LSEG Stellantis would secured the needed capacity to meet the company’s U.S. electrification target.
Stellantis has said it wants to secure more than 130 GWh of global battery capacity by 2025 and over 260 GWh by 2030.
As part of this plan Stellantis has said it will build three battery plants in Europe – in Germany, France and Italy – and two in North America.
The group, whose brands include Peugeot, Fiat, Opel and U.S. best-sellers Jeep and Ram, also aims to have more than 70% of its sales in Europe be of low-emission vehicles by 2030.
The Stellantis-Samsung SDI venture aims to start operations by the first half of 2025 with an initial annual battery production capacity of 23 GWh, while it could increase to 40 GWh in the future, the two companies said in a joint statement.
They did not provide any financial details.
The batteries produced at the U.S. joint venture will be supplied to Stellantis’ factories in the United States, Canada and Mexico. The location of the factory is under review.
Samsung SDI, an affiliate of South Korean tech giant Samsung Electronics, already has EV battery plants in South Korea, China and Hungary, which supply customers such as BMW and Ford Motor.
By 0905 GMT Milan-listed shares in Stellantis were up 0.6%, broadly in line with Italy’s blue-chip index. Samsung SDI shares closed up nearly 2%.
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(Reporting by Heekyong Yang in Seoul and Giulio Piovaccari in Milan; editing by Himani Sarkar and Jason Neely)