South Korean battery producer Samsung SDI announced that it secured its initial contract for supplying EV batteries with German luxury vehicle manufacturer Mercedes-Benz.
Samsung SDI and Mercedes-Benz have signed a multi-year agreement for EV battery supplies for upcoming compact and midsize models, while also agreeing to work together on the development of next-generation batteries, according to reports.
Samsung is the tech powerhouse that caters to consumers by producing a wide range of products, including smartphones, televisions, and semiconductors, whereas Samsung SDI is its subsidiary focused on manufacturing batteries and materials primarily for other businesses.
The agreement broadens Samsung SDI’s presence in Europe’s automotive industry, where it already maintains supply connections with manufacturers such as BMW, brands linked to Stellantis through joint ventures, Volvo Group, and Jaguar Land Rover.
The existing agreement with Mercedes involves the Korean firm supplying high-performance batteries for the German automaker’s upcoming vehicle launch, increasing hopes for more cost-effective premium EVs in Europe.
The accord arrives as the European Union persists in tackling affordability issues in the electric vehicle market.
The batteries will incorporate high-nickel NCM (nickel, cobalt, and manganese) materials, a blend characterized by providing an enhanced driving range and a longer lifespan.
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“Mercedes-Benz intends to incorporate the batteries into upcoming compact and mid-size electric SUVs and coupe models as a component of its approach to focus on the next-generation electric vehicle market,” as per reports.
The two companies have also committed to collaborating on projects, such as the joint development of next-generation battery technology, as stated.
The agreement was finalized as Mercedes' top executives encountered important Korean suppliers in Seoul on Monday.
The Korea Herald reports, referencing industry sources, that Samsung SDI's supply quantities are projected to hit tens of gigawatt-hours, with the overall contract value anticipated to surpass 10 trillion won (€5.8bn), though specific numbers have not been revealed.
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While in South Korea, Mercedes-Benz also reiterated its enduring collaboration with LG, which has included joint efforts in display and battery industries.
"Mercedes-Benz is pleased to enhance cooperation in key technology sectors with Korean partners who have exceptional technological expertise," stated Jörg Burzer, chief technology officer of Mercedes-Benz Group AG.
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"Enhancing our connections, Mercedes-Benz is speeding up advancements in electrification, digitalization, and the future of transportation," he added.