South Korean battery maker Samsung SDI said on Monday that it clinched its first agreement for the supply of EV batteries with German luxury carmaker Mercedes-Benz.
Samsung SDI and Mercedes-Benz have inked a multi-year EV battery supply deal covering future compact and midsize models, while also agreeing to collaborate on next-generation battery development, according to company statements.
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Samsung is the consumer-facing tech giant that produces everything from smartphones, televisions and semiconductors, while Samsung SDI is its affiliate that makes batteries and materials mainly for other companies.
The agreement expands Samsung SDI’s footprint in Europe’s automotive sector, where it already has an established supply relationship with carmakers including BMW, Stellantis-linked brands via joint ventures, Volvo Group and Jaguar Land Rover.
The current deal with Mercedes will see the Korean company provide high-performance batteries for the German carmaker’s future vehicle rollout, raising expectations for more affordable premium EVs in Europe.
The agreement comes as the European Union continues efforts to address affordability challenges in the EV market.
The batteries will use high-nickel NCM (nickel, cobalt and manganese) materials, a combination described as offering extended driving range and longer lifespan.
“Mercedes-Benz plans to use the batteries in future compact and mid-size electric SUVs and coupe models as part of its strategy to target the next-generation electric vehicle market,” the statement said.
The two companies also agreed to work together on projects, “including joint development of next-generation battery technology," according to the statement.
The deal was signed as Mercedes’ senior management met key Korean suppliers in Seoul on Monday.
According to the Korea Herald, citing industry sources, Samsung SDI’s supply volumes are expected to reach tens of gigawatt-hours, with the total contract value set to exceed 10 trillion won (€5.8bn), although exact figures have not been disclosed.
During the visit to South Korea, Mercedes-Benz also reaffirmed its long-standing partnership with LG, which has involved cooperation in display and battery sectors.
“Mercedes-Benz is proud to strengthen collaboration in core technology areas with Korean partners who possess world-class technological competitiveness," said Jörg Burzer, chief technology officer of Mercedes-Benz Group AG.
"By deepening our ties, Mercedes-Benz is accelerating innovation in electrification, digitalisation, and the future of mobility," he continued.
Samsung SDI’s share price rose 4.9% at closing trade in South Korea on Monday, while Mercedes-Benz shares fell by more than 2% around midday in Europe.
