Samsung SDI to invest $901 mn to expand EV battery capacity in Hungary

[Photo provided by Samsung SDI Co.]

South Korea’s Samsung SDI Co. will spend nearly 1 trillion won ($901.4 million) to ramp up capacity of its battery plant in Hungary with hopes to expand its presence in Europe where demand for electric vehicles is rapidly growing.

Samsung SDI, No. 5 in global EV power share of 2020, said on Tuesday that it will buy rights offering worth 403.8 billion won from its subsidiary Samsung SDI Hungary Zrt. to back the capex. Each of the new shares – 75,000 in total – is worth 4,000 euros.

Samsung SDI’s Hungary unit will separately borrow 538.3 billion won or 400 million in euros from state lender Korea Development Bank with debt guarantee from its parent for three years.

The capital raised from new share issue and debt will be used to expand capacity in Hungary to meet increased demand from European finished carmakers, the company said.

Shares of Samsung SDI fell 3.24 percent to close at 687,000 won on Wednesday.

[Photo provided by Samsung SDI Co.]

Samsung SDI operates a 30 gigawatt-hour (GWh) electric vehicle battery plant in Goed, north of Hungary. The facility is a base for battery supply to finished automakers in Europe including BMW and Volkswagen.

The ramp-up will likely beef up production capacity of the Hungary plant to over 40Gwh.

Samsung SDI plans to apply stacking method to its new line. The method allows improved battery internal space efficiency as major battery materials anode, cathode, and separation membranes are stacked up, raising battery energy density as to the existing winding method that rolls materials in battery. Batteries produced based on the new method improve performance and driving range of electric vehicles.

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