Samsung SDI signs first battery supply contract with Hyundai Motor

[Courtesy of Samsung SDI]

Samsung SDI Co., South Korea’s second-largest battery maker, will supply batteries to Hyundai Motor’s next-generation electric vehicles for the European market from 2026 to 2032, the company said on Monday. This marks the first battery supply contract between the two companies for EVs.

According to industry insiders, the battery volume supplied by Samsung SDI in the seven-year deal will be enough to supply 500,000 EVs. In monetary terms, this translates to an estimated 1 trillion won ($743.39 million) annually, or 7 trillion to 8 trillion won over the seven-year period.

The product to be supplied by Samsung SDI is ‘P6,’ a high-performance prismatic battery currently under development. P6 batteries feature a 91 percent high-nickel NCA (Nickel-Cobalt-Aluminum) cathode and its proprietary silicon-based anode, maximizing energy density to the highest level, according to the company. Higher energy density contributes to longer driving ranges for vehicles.

“We plan to supply P6 batteries produced at our Hungarian plant to Hyundai Motor’s local plants in Europe,” a Samsung SDI official said. Hyundai has a plant in the Nošovice industrial zone in the Czech Republic which produces models such as the Kona EV, Tucson Hybrid and Plug-in Hybrid and whose annual production capacity is 300,000 to 400,000 units.

Battery industry insiders note that the contract between the two companies has a delivery date of 2026. Hyundai Motor is preparing for a platform for the second generation of EVs following the ‘E-GMP’ which it targets readying by 2025. It is thus expected that EVs based on the second-generation platform, featuring Samsung SDI batteries, will be produced in the European market from 2026 onwards.

Given that the auto giant plans to utilize the second-generation platform for a wide range of vehicles, from small electric cars to sport utility vehicles (SUVs) and the Genesis brand, Samsung SDI batteries could also be used in Hyundai‘s premium EVs.

For Samsung SDI, the deal is significant in terms of expanding its supply sources for prismatic batteries and securing Hyundai Motor, which is rapidly growing in the EV market, as a customer. Hyundai Motor has been using pouch-type batteries from SK on Co. and LG Energy Solution Ltd.

This collaboration between Samsung and Hyundai is also seen as an effort to settle old scores and strengthen cooperation for future vehicle competitiveness. The two groups have not directly cooperated since Samsung entered the automobile business. Samsung’s acquisition of Harman International Industries Inc. did lead to the inclusion of audio systems in Hyundai vehicles, but direct cooperation was limited.

The shift in the atmosphere came in June 2023 when Hyundai Motor announced it would use Samsung Electronics Co.’s Exynos Auto V920 processor for its in-car infotainment systems. Hyundai Motor previously adopted chips from Intel Corp., Nvidia Corp., and other companies, but after Samsung Electronics strengthened its automotive semiconductor capabilities, the auto maker chose to incorporate Samsung’s processor. Hyundai Motor subsequently installed surround view and rear monitor cameras supplied by Samsung Electro-Mechanics Co., expanding the scope of cooperation to areas such as semiconductors, displays, cameras, and audio.