South Korea’s Samsung SDI (006400. KS) said on Monday it will supply Hyundai Motor (005380. KS), the world’s fourth-largest carmaker, with electric vehicle (EV) batteries for seven years starting in 2026. It marks the first battery supply deal between the two chaebol companies. Samsung SDI already supplies EV batteries to GM, Stellantis, and BMW, among others.
The agreement will enable Hyundai to diversify its battery form factor and shift to prismatic batteries from the pouch-type batteries it has mainly used in its EVs. The partnership will also reinforce the alliance between the two partners in research on next-generation EV battery platforms.
Samsung SDI will provide Hyundai with prismatic EV batteries made at its factory in Hungary. The batteries, known as P6, will be delivered to Hyundai’s European plants for assembly of EVs targeting the European market for 2026 through 2032.
The partnership will boost sales of EVs, which have been increasing in Europe as countries there introduce stricter emission standards for traditional gasoline-powered cars and offer generous subsidies to encourage their adoption. It will also cement the position of both companies in the global EV market, where they compete with LG Energy Solution, SK On, and LG Electronics.
Hyundai, which operates car brands including Kia and Elantra, has set a target to produce 3.64 million EVs globally by 2030 to become one of the top three EV producers in the world by that time. The carmaker needs many EV batteries to achieve its goal, which are critical components in lowering emissions and driving range.
To meet its EV production plans, Hyundai will have to increase production of its SKIV and Nexo models and expand the production volume of its existing EVs, which is why it relies on domestic EV battery suppliers such as LG, SK On, and Samsung SDI.
Earlier this year, the automaker and Samsung SDI agreed to jointly build a nickel-rich prismatic and cylindrical EV battery cell factory in the US. The plant in New Carlisle, Indiana, is scheduled to start operations in 2026. The two companies will invest over $3 billion to run the plant, which will have a capacity of 30 GWh per year, enough for about 350,000 EVs. They will operate the plant with a 60-40 share and expect to make EV batteries for more than 25 GM models.
