Samsung SDI, Stellantis to set up EV battery joint venture in U.S.

A Stellantis sign is seen outside the company's headquarters in Auburn Hills, Michigan, U.S., June 10, 2021.

South Korea's Samsung SDI Co Ltd (006400.KS) said on Friday that it had entered an agreement for a joint venture with automaker Stellantis NV (STLA.MI) to produce electric vehicle (EV) battery cells and modules in the United States.

The joint venture aims to start operations by the first half of 2025 with an initial annual battery production capacity of 23 gigawatt hours (GWh), the South Korean battery maker said.

The joint venture's annual battery production capacity could increase to 40 GWh in the future, Samsung SDI added.

No financial details of the deal were provided.

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 (005930.KS), already has EV battery plants in South Korea, China and Hungary, which supply customers such as BMW (BMWG.DE) and Ford Motor (F.N).

The Stellantis-Samsung SDI tie-up comes less than a week after the world's No. 4 automaker signed a battery joint venture agreement with South Korea's LG Energy Solution to produce 40 GWh of batteries a year.

With these two joint ventures, Stellantis has secured up to an annual battery production capacity of 80 GWh, which could power about 1.2 million electric vehicles.

Stellantis, formed in January from the merger of Italian-American automaker Fiat Chrysler and France's PSA, has said it wants to secure more than 130 GWh of global battery capacity by 2025 and more than 260 GWh by 2030.

Samsung SDI shares rose as much as 2.4% to 740,000 won ($628), highest since late last month, versus benchmark KOSPI's (.KS11) 0.2% fall as of 0540 GMT.

($1 = 1,177.4400 won)

Source: Reuters / Reporting by Heekyong Yang; Editing by Himani Sarkar