Samsung SDI Secures Massive $6.8B Electric Vehicle Battery Contract with Mercedes-Benz

Key Highlights

• Samsung SDI clinched its inaugural long-term battery supply agreement with Mercedes-Benz for electric vehicles
• High-nickel NCM battery technology will power upcoming compact and midsize Mercedes EV SUVs and coupes
• Deal valuation estimated to surpass 10 trillion Korean won (approximately $6.8 billion) with supply volumes reaching tens of gigawatt-hours
• Samsung SDI shares jumped 4.87% following the announcement; Mercedes-Benz stock declined 2.49%
• Mercedes-Benz joins Samsung SDI’s expanding European portfolio that already includes BMW and Volkswagen

Samsung SDI secured a groundbreaking electric vehicle battery supply partnership with Mercedes-Benz on Monday, propelling its shares upward by 4.87%. The landmark agreement was formalized during a signing ceremony held in Seoul, with senior leadership from both corporations in attendance.

The battery cells will utilize advanced high-nickel nickel-cobalt-manganese (NCM) technology. According to Samsung SDI, this chemistry provides superior energy density, extended driving range, enhanced durability, and robust power performance.

Mercedes-Benz intends to integrate these batteries into its forthcoming lineup of compact and midsize electric SUVs and coupe variants. According to industry insiders, the battery supply is designated for a new electric vehicle model scheduled for launch in 2028.

While Samsung SDI refrained from publicly confirming the financial terms, industry analysts estimate supply quantities will reach tens of gigawatt-hours, with the overall contract value projected to exceed 10 trillion won — approximately $6.8 billion.

The Seoul ceremony featured Samsung SDI’s President and CEO Choi Joo-sun, alongside Mercedes-Benz Group Chairman Ola Kallenius and Chief Technology Officer Jorg Burzer.

Long-Term Negotiations Led to Partnership

This strategic alliance represents the culmination of extensive negotiations. Samsung Electronics Chairman Lee Jae-yong had been cultivating a stronger relationship with Mercedes-Benz over an extended period.

Last November, Kallenius made a trip to South Korea and conducted meetings with Lee at Samsung’s exclusive VIP guest facility in Seoul. Their discussions centered on potential collaboration opportunities spanning automotive electronics and battery technology.

The partnership gained significant traction after Lee journeyed to Germany alongside Samsung SDI President Choi for direct negotiations with Mercedes-Benz executives.

The existing business relationship between Samsung and Mercedes-Benz provided a solid foundation for this battery agreement. Samsung’s subsidiary Harman currently provides the German automaker with infotainment systems and premium audio solutions.

For Mercedes-Benz, this partnership represents a strategic expansion of its supplier network, which already encompasses Korean battery manufacturers LG Energy Solution and SK On. The automaker has been proactively diversifying its battery procurement strategy in preparation for its next-generation electric vehicle portfolio.

Strategic Implications for Samsung SDI

This contract positions Mercedes-Benz alongside Samsung SDI’s established European customer base, which features BMW and Volkswagen.

Samsung SDI emphasized that the batteries will incorporate its exclusive safety technologies, positioning these innovations as a crucial competitive advantage in securing the agreement.

Beyond the immediate supply commitment, both organizations expressed intentions to broaden their collaboration to encompass joint research and development of advanced battery technologies and future mobility innovations.

The substantial order is anticipated to significantly enhance Samsung SDI’s revenue streams and manufacturing capacity utilization. The multi-year contract is structured to support production requirements for Mercedes-Benz’s 2028 electric vehicle rollout.

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