Samsung SDI and Mercedes-Benz In Advanced Discussions on EV Battery Supply

Samsung SDI is in advanced discussions to provide prismatic battery cells for Mercedes-Benz's forthcoming electric vehicle lineup, with supply expected to commence in 2028. The two companies are exploring the possibility of establishing a dedicated production line or a separate manufacturing facility within Europe. Potential locations currently under consideration include Austria, Slovakia, and the Czech Republic.

Senior-level talks have gained significant momentum over the past year. During meetings in Seoul last November and a subsequent business trip to Europe in March, Samsung Electronics Chairman Lee Jae-yong and Samsung SDI President Choi Joo-sun presented a preliminary framework for battery supply to Mercedes-Benz executives. Chairman Lee's ties to the automaker's parent group date back to his tenure with Daimler AG, and Samsung has already contributed to Mercedes-Benz's electric vehicle ecosystem through infotainment systems delivered by its subsidiary, Harman.

Should an agreement be reached, it would represent the first integration of Samsung SDI batteries into a Mercedes-Benz electric model. Industry projections indicate the order volume could reach tens of gigawatt-hours, with the potential contract value exceeding 10 trillion won over a long-term horizon. Mercedes-Benz is preparing to broaden its EV offerings based on the Mercedes Modular Architecture (MMA) platform, which is designed to accommodate prismatic cell formats.

Presently, Mercedes-Benz maintains a diversified battery sourcing strategy, procuring pouch, prismatic, and cylindrical cells from various manufacturers including LG Energy Solution, SK On, CATL, and Parisis. The company's earlier ambition to pursue in-house cell production through the joint venture Automatic Cells Company (ACC) has encountered setbacks. ACC's facility in France, initially targeted for a 13 GWh capacity, has experienced delays and difficulties in achieving stable production yields. In contrast, Samsung SDI's existing operational footprint for prismatic cell manufacturing in Europe positions the firm as a strong alternative to fulfill Mercedes-Benz's supply chain needs.

The European Union's Industrial Acceleration Act further emphasizes the strategic necessity of localized manufacturing and resilient supply networks, driving both automakers and battery producers to solidify regional partnerships and extended procurement contracts.

If finalized, the supply deal will elevate Samsung SDI to a key partner for all three of Germany's premier luxury automotive brands, adding to its established supply relationships with BMW and Volkswagen.

In a separate development, Samsung SDI is gearing up for the mass production of 46-millimeter cylindrical cells at BMW's Hungarian plant. Meanwhile, LG Energy Solution has already secured a substantial agreement to deliver over 150 GWh of comparable cylindrical cells to Mercedes-Benz starting after 2028.