Samsung begins penetrating into the automotive battery market in China
◇ A groundbreaking ceremony was held for an automotive battery plant at Xi’an in Shanxi Province, China.
◇ This plant will start running in October 2015, supplying batteries for over 40,000 electric vehicles annually. Steady investment will be made up to $600 million by 2020, aiming to achieve over $1 billion in sales.
◇ ‘Samsung-ARN (Xi’an) Battery Group Co., Ltd.’ was established for the purpose of entering the Chinese market.
Pre-orders for first produced batteries were made by global/local OEMs already.
◇ “Xi’an Plant will become the top automotive battery factory in the world,” said Sangjin Park, a CEO of Samsung SDI.
□ Samsung SDI took a first step towards China rising into the biggest EV market.
Samsung SDI hosted a groundbreaking ceremony for a Chinese automotive battery plant at GaoXin Industrial Development Zone located at Xi’an in Shanxi Province, China, attended by 300 people including Sangjin Park, a CEO of Samsung SDI, Wonkie Chang, a president of Samsung China headquarters, Liu Chin-Chen, a governor of Shanxi Province, Dong Jun, a mayor of Xi’an City, and officials from global/local automakers.
Xi’an Plant is expected to be built and fully run from October next year. This factory will be large enough to run the entire process for producing automotive battery cells for the first time among global battery companies in China, enabling battery supply for over 40,000 EVs annually. Also, steady investment will be made up to $600 million by 2020, aiming to achieve over $1 billion in sales.
This January, Samsung SDI signed a MOU with Anqing Ring New Group (hereinafter “ARN”), the best car engine piston and cylinder manufacturer in China, and Xi’an Gaoke Group, a real estate investment company. This June, they finally established a joint venture ‘Samsung-ARN (Xi’an) Battery Group Co., Ltd.’ (hereinafter ‘Samsung-ARN’).
Samsung SDI and ARN own 50% of Samsung-ARN shares respectively. Also, Daehyoung Cho, a senior vice president of Samsung SDI, has been appointed as a first representative.
Samsung-ARN will supply batteries to global/local automotive OEMs in China after beginning its mass production in October 2015. It will also supply batteries to an ESS (Energy Storage System) joint venture expected to be established in the second half of next year. In fact, Samsung-ARN has already obtained enough pre-orders to run a production line at full capacity in 2016.
□ The Chinese government intends to distribute 5 million EVs and PHEVs by 2020 to solve nation’s environmental problems caused by rapid increase in car penetration and oil consumption. In order to encourage people to purchase electric vehicles, the government exempted purchase taxes and provides subsidies for eco-friendly cars and ordered public institutions to maintain a certain percentage of government vehicles with eco-friendly cars.
Samsung-ARN plans to pioneer and dominate the Chinese EV battery market with Samsung SDI’s top battery technology in the world and ARN’s auto parts business know-how and marketing synergy.
According to global market research agencies (B3, IHS) and Samsung SDI, global EV battery market demand is expected to grow from 2.4 million batteries in 2014 to 8 million in 2020.
Samsung SDI is currently supplying automotive batteries to prominent global automotive OEMs such as BMW and Chrysler. BMWi3, a BMW’s electric vehicle adopting Samsung SDI batteries is becoming popular worldwide and was sold over 5,000 units in the first half this year.
Samsung SDI is reinforcing cooperation and partnership with global automotive OEMs. This July, Samsung SDI signed a MOU with BMW on automotive battery supply worth trillions of KRW and joint development of next generation battery materials. This June, Samsung SDI and Ford, one of Big 3 U.S. automakers, decided to jointly develop ‘Ultralight Lithium-ion Battery’ in collaboration.
On August 15 (Fri.), Samsung SDI signed a MOU on a joint venture with Sungrow of China to target the Chinese EV and ESS market.
□ “Combining know-how and knowledge of Samsung SDI and Anqing Ring New Group, then creating synergy between both companies, I am certain that Xi’an Plant will become the top automotive battery factory not only in China also in the world,” said Sangjin Park, a CEO of Samsung SDI. “I hope Xi’an City to become the Silk Road for new renewable energy and bring a beautiful future with energy technology”