Published : Oct. 23, 2015 - 10:09
South Korean battery maker Samsung SDI on Thursday held the opening ceremony of its new automotive battery plant in China, with aims to tap further into the world’s largest electric vehicle market.
The plant, which started operations in September, can produce batteries for more than 40,000 electric vehicles per year. It can handle the whole manufacturing process of EV batteries, including battery cells and modules.
Samsung SDI’s new plant in Xian, China Samsung SDI
Samsung SDI is the first battery-maker in China that has established a manufacturing line dedicated to automotive batteries.
The company plans to beef up production of automotive batteries not just for global carmakers, but also soaring Chinese companies, such as Yutong, the world’s largest bus maker, and Foton, China’s No. 1 truck maker.
More investment is expected to be poured into the all-important market. The company said it would invest a combined $600 million by 2020 to extend its production base in the country. It aims to make $1 billion in sales by then.
‘We will make the Xian plant the center stage of global EV batteries,” said Samsung SDI CEO Cho Nam-seong at the opening ceremony that was attended by some 200 government and company officials.
According to market research firm IHS, the global EV market is estimated to grow from last year’s 2.2 million cars to 6.3 million by 2020.
About 80,000 EVs were sold last year in China, a 400 percent surge from the previous year. The sales figure is expected to soar to 160,000 this year to 240,000 next year.
In October, the Chinese government also announced plans to build extended charging networks for 5 million full-electric cars by 2020.
Samsung SDI is also speeding up its foray into the still nascent but lucrative market.
The company set up a joint venture, Samsung ARN Xian Power Battery, together with Anqing Ring New Group and real estate investor Xian, to seek business synergies.
Samsung SDI, a major force in automotive batteries, said its business has entered the growth phase from this year, through acquisitions and new orders recently.
In February, the company acquired the battery pack business from Magna International, a global car parts maker. Following the acquisition, the company showcased its new low-height battery pack system, Low Pack, at the Frankfurt motor show in September. The new battery system allows carmakers more flexibility on EV styling.
The company is also teaming up with global carmakers such as BMW, Audi and Bentley to expand its presence in the market.
Especially, it is the sole battery supplier to BMW. The German carmaker also showed its commitment to Samsung in March, saying it has no intention of having a second supplier unless there is a drastic increase in demand.
BMW plans to use Samsung batteries for the upcoming plug-in hybrid models of its 3 and 7 Series sedans next year.
More recently, Samsung SDI, together with LG Chem, has been working on a brand-new battery that can drive 500 kilometers on a single charge to be adopted by Audi’s new electric car by 2018.
By Lee Ji-yoon (jylee@heraldcorp.com)