Samsung SDI Pushes for Battery Supply Negotiations with Mercedes-Benz… Considering European Production Base

*This content was translated by AI.

According to industry sources on the 14th, Samsung SDI is moving forward with battery supply for Mercedes-Benz's next-generation electric vehicles, and cooperation between the two companies is reportedly underway.

The two companies are discussing various cooperation plans regarding the supply of prismatic batteries for 2028 model electric vehicles. Industry sources indicate that Samsung SDI and Mercedes-Benz are in final negotiations, including options such as establishing a production base in Europe or designating a LINE exclusively for Mercedes-Benz. In this process, Austria, Slovakia, and the Czech Republic have been mentioned as potential sites for new factories.

Lee Jae-yong, Chairman of Samsung Electronics, has maintained contact with Mercedes-Benz executives since last year, accelerating cooperation discussions. In November last year during a meeting in Seoul and in March this year during a business trip to Europe, Lee (Chairman) and Samsung SDI President Choi Ju-sun worked with Mercedes-Benz to finalize battery supply plans. Lee (Chairman) has built a relationship with Mercedes-Benz since the Daimler AG era and has expanded cooperation by supplying infotainment platforms for Mercedes-Benz electric vehicles through its electronics subsidiary, Harman.

If Samsung SDI cooperates with Mercedes-Benz, its batteries will be installed in Mercedes-Benz electric vehicles for the first time. The supply volume is expected to reach several gigawatt-hours (GWh), and if a long-term contract is secured, the order value is estimated to exceed 10 trillion won. As Mercedes-Benz expands its LINE of electric vehicles based on the MMA (Mercedes Modular Architecture) platform, which adopts prismatic batteries, there is a high possibility that Samsung SDI's batteries will be applied.

Mercedes-Benz has previously sourced batteries in various form factors, including pouch, prismatic, and cylindrical types, from multiple suppliers such as LG Energy Solution, SK On, CATL, and Farasis. However, securing prismatic batteries in Europe remained a challenge, and its own procurement plan through ACC (Automotive Cells Company) faced delays and yield issues. ACC's French plant started with a capacity of 13 GWh, but actual production remained limited. In this context, Samsung SDI, which possesses prismatic battery production capabilities in Europe, has emerged as an alternative.

Policy changes such as the European Union's Industrial Acceleration Act (IAA) have also strengthened the need for production and supply chain reinforcement in Europe, adding momentum to the cooperation between Samsung SDI and Mercedes-Benz. Korean battery companies must increase the EU origin ratio through long-term supply contracts, technical cooperation, or the establishment of joint ventures (JVs).

If Samsung SDI's supply to Mercedes-Benz is finalized, it will become a supplier of batteries to all three German premium automakers, following BMW and Volkswagen. Samsung SDI is also preparing the Yangsan facility for its 46mm cylindrical batteries for BMW in Hungary's Gyor plant, while LG Energy Solution has signed a supply contract for 46-series cylindrical batteries with Mercedes-Benz and plans to supply more than 150 GWh after 2028.

Mercedes-Benz has recently seen a rebound in electric vehicle sales, with first-quarter sales increasing by 11% year-on-year to 50,400 units. With the expansion of its electric vehicle LINE and recovery in sales, battery demand is rising, and the scale of cooperation with Samsung SDI may be further expanded.

According to a report by Dailycast, "The project is in the final stages in Europe, and the key is establishing a large-scale production base. It is difficult to control costs through a structure that imports batteries from abroad." Another official stated, "Samsung SDI's supply to Mercedes-Benz is part of the 2028 model electric vehicle project, and the volume itself is substantial. There is a high possibility that large-scale orders will be centered on prismatic batteries."

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*This content was translated by AI.