Samsung SDI to invest $849 million to expand EV battery plant in Hungary
Samsung SDI, an arm of South Korean multinational conglomerate that specializes in developing Lithium Ion Battery technology, has announced that it will invest 942 billion won (US$850 million) to expand its battery factory in Göd, Hungary, near the capital city of Budapest.
The Göd, Hungary-based battery factory of the Korean manufacturer is currently supplying cells for a number of automakers, including German luxury carmakers BMW and Volkswagen (VW). It already has a capacity to produce battery cells equivalent to 30 GWh per annum. The expansion of the facility is expected to increase the capacity to more than 40 GWh in the future.
The construction of the existing battery cell factory was completed in 2017. Production at the factory started in 2018, with initial production of batteries for as many as 50,000 EVs per year. However, nothing was revealed by the South Korean multinational conglomerate as to when the expansion of the factory will be completed.
With the huge investment, which will partly be financed by the company’s Hungarian subsidiary Samsung SDI Hungary Zrt and some lenders, Samsung SDI is apparently trying to strengthen its position in the fast-growing electric vehicle (EV) market of Europe. The Hungarian subsidiary will raise capital from investors by issuing shares worth 404 billion won to finance the factory expansion project.
As government around the globe are pushing automakers to make a shift from conventional petrol/diesel-powered vehicles to environment-friendly EVs to drive clean as well as sustainable mobility, battery manufacturers are enjoying a great potential for growth in the coming years. Increasing demand for EVs is, in turn, leading to increase in demand for batteries. In 2017, EV battery manufacturers worldwide produced an estimated 30 GWh of storage capacity, which represents a jump of 60 per cent in storage capacity from the previous year. The trend is expected to continue for the many years to come.
Separately, an unnamed representative of Samsung SDI revealed that the company is also mulling plans to build a second factory in Hungary. However, the representative didn’t disclose details, saying a decision and timetable for the construction of the new factory is yet to be made. In addition to Hungary, Samsung SDI has battery cell factories in China and its home country of South Korea. Globally, the company ranks fifth among battery cell producers.
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