Samsung SDI expands in US via cylindrical, ESS batteries for wheels and chargers

[Graphics by Song Ji-yoon]

South Korea’s battery maker Samsung SDI Co. has been quietly making strides in electric wheel power market in the United States with its edge in cylindrical type and storage cell while much spotlight had been on its two other rivals LG Energy Solution and SK Innovation with their boisterous legal disputes, peacemaking and investments in the world’s largest economy fast moving with green and EV initiative.

According to industry sources on Wednesday, Samsung SDI is engaged in negotiation with another U.S. EV maker to supply cylindrical batteries after it was consigned to produce power for the world’s first all-electric pickup truck of up-and-rising U.S. EV startup Rivian which will be supplying Amazon.com with 100,000 electric vans.

Samsung SDI has agreed to supply cylindrical types to Vietnam’s EV manufacturer VinFast seeking forays into the U.S. automotive market next year. VinFast plans to release two EV models in the U.S. with an aim to deliver more than 40,000 units per year.

“We are engaged in EV projects with many clients,” said a Samsung SDI official, expecting the ratio of cylindrical battery for EVs to increase to double digits by next year from single-digit share this year.

The surge in orders in both cylindrical and prismatic battery cells, the company is on path to achieve best earnings this year.

Samsung SDI reported three-month results in the first quarter, a traditional slow season, with its bottom line turning around by more than 200 times on year.

Samsung SDI’s cylindrical batteries were mostly used in power tools but it has shifted focus to EV vehicles after its supply deal with Rivian. Industry experts now expect its cylindrical lithium capacity will be ramped up fast this year.

Global cylindrical battery market grew more than 10 percent last year against a year ago despite the virus threats. Some industry observers expect the Korean battery major would make investment in expanding cylindrical battery production capacity this year.

The use of prismatic battery cells in energy storage system applied to run not just wheels but charging stations also is rising quickly.

[Graphics by Song Ji-yoon]

Samsung SDI, a global leader in the burgeoning ESS market, dominated the largest 35 percent share as of 2019 with a combined capacity of 3.8 gigawatt-hours (GWh) deployed. Its supplies were used in a total of 6.2 GWh ESS last year, and the figure is estimated to increase to 9.3 GWh, amounting to a 32 percent share in the market.

The U.S. government early this year expanded the investment tax credit for ESS business to 26 percent from 20 percent, which means an ESS project owner can be offered the government subsidy equivalent to 26 percent of its investment.

Samsung SDI has been supplying its ESS batteries to Tesla since the fourth quarter of last year. Tesla deployed ESS with a capacity of 445 megawatt-hours (MWh) in the January-March period, surging 71 percent from a year-ago period.

Samsung SDI shares closed 4.9 percent lower at 602,000 won in Seoul trading on Thursday.

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