Samsung SDI has decided to build a new lithium-ion battery factory for electric vehicles in the US, TheElec has learned.
The company is aiming to start construction of the factory in 2023, with production beginning in 2025, people with direct knowledge of the matter said.
The plan’s specifics will be finalized within the year.
However, the company is yet to decide on where to build the factory or whether it will form a joint venture to proceed.
The new factory will be Samsung SDI’s first for battery cells in the US. The company had previously imported the cells and performed back-end processes such as making them into modules and packs.
Samsung SDI is expanding into the US because it is now sure of demand. Sales from battery supplier to its customer Rivian are expected to be reflected in its earnings starting in the second half of this year.
Building a US factory will also qualify the company get tax incentives from the Biden Administration’s USMCA clause.
In the past, the US has offered generous subsidies to foreign companies building manufacturing facilities there. LG Energy Solution received US$151.4 million in subsidies from the Obama Administration for its factory in Michigan back in 2009. Considering LG spent US$330 million for the factory, the subsidy is quiet substantial.
Samsung SDI could very well form a joint venture for the factory. It was in talks with various automobile companies for a potential joint venture.
There is high demand for uninterrupted power supply (UPS) in the US. This means Samsung SDI can highlight its NCM batteries, which has high outputs.
A Samsung SDI spokesperson said nothing has been finalized yet. In June, company CEO Jun Young-hyun told reporters the company was considering entering the US market.
Compatriots LG Energy Solution and SK Innovation already have factories in the US.