Samsung SDI to Take Full Control of Indiana Battery Plant as GM Exits Joint Venture
The South Korean battery maker will buy out General Motors' share of their $3.5 billion joint venture, citing slower than expected demand for electric vehicles, even as the two companies sign a new deal to develop batteries together.
Samsung SDI said Tuesday it will buy out General Motors' entire stake in their joint battery venture in Indiana, taking full ownership of a plant the two companies built together starting in 2024.
The South Korean battery maker said it plans to acquire GM's 49.99 percent stake in the venture, known as SynergyCells, according to Korea Herald. Samsung SDI already holds the remaining 50.01 percent. The company did not say how much it will pay or when the deal will close, Korea Herald reported.
In a regulatory filing, Samsung SDI said the decision reflects weaker than expected growth in electric vehicle demand and that it will use the plant, once wholly owned, to supply batteries for a range of uses beyond EVs, including energy storage systems, according to Channel NewsAsia. The company said in a statement that it and GM "have now decided to seek other forms of cooperation other than the joint venture," citing changed market conditions since the venture was first announced, Channel NewsAsia reported.
The Indiana plant, located in New Carlisle, was expected to have annual production capacity of 27 gigawatt-hours and to begin mass production in 2027 when the venture was announced two years ago, according to Channel NewsAsia. Reuters had reported earlier this year that construction had slowed because of weak EV demand, Channel NewsAsia reported. GM and other automakers scaled back EV production plans after a $7,500 federal tax credit expired last September, according to Channel NewsAsia.
A partnership that keeps evolving
Despite GM's exit from the joint venture, the two automakers are not parting ways entirely. Samsung SDI and GM have signed a separate joint development agreement to design prismatic batteries with high energy density and fast-charging capability for GM's next-generation electric vehicles, according to Yonhap. A Samsung SDI official said in a statement that the arrangement "reflects shifting market dynamics while allowing us to preserve our strategic partnership with GM," according to Korea Herald.
Samsung SDI also plans to add a line at the Indiana plant dedicated to energy storage system batteries, a fast-growing market in the United States even as EV sales slow, Korea Herald reported. The company has signed several large supply deals with US energy companies over the past year to expand that side of its business, according to Korea Herald.
Once the deal closes, the Indiana site will become Samsung SDI's first wholly owned battery plant in North America. Its Korean rivals, LG Energy Solution and SK On, both built standalone US plants earlier in their expansion instead of relying mainly on joint ventures, according to Korea Herald. Samsung SDI already runs a separate 23-gigawatt-hour battery plant in Indiana through a joint venture with Stellantis, which also makes EV and energy storage batteries, Yonhap reported.
GM and LG Energy Solution made a similar shift in March, converting a battery plant in Tennessee to focus on energy storage batteries instead of EV batteries, according to Channel NewsAsia.
Sources
Related coverage
Zelenskyy Says North Korea Plans to Send Up to 50,000 More Troops to Russia
Ukraine's president said Pyongyang has decided to send tens of thousands more soldiers to fight alongside Russian forces, and he pressed South Korea to help Kyiv with air defenses in response.
UK Consumer Confidence Hits Two-Year High as World Cup and Staycations Boost Spending
A Barclays survey found Britons feeling more secure about their jobs and the economy in July, with pub visits, cinema trips and domestic vacations driving a rise in discretionary spending.
Investors Are Betting the Fed Will Beat Inflation. A Wall Street Columnist Says Don't Count On It.
Federal Reserve Chair Kevin Warsh insists there's no wiggle room on the central bank's 2% inflation goal. Bond markets seem to believe him, but a MarketWatch columnist argues the government's mounting debt makes that promise hard to keep.
Trump Signs Order to Cut Childhood Vaccine List and Break Up MMR Shot
The president signed an order pushing states to loosen school vaccine mandates and calling for the combined measles, mumps and rubella shot to be split into three, over the objections of pediatricians and a Republican senator who is also a doctor.