Key Highlights
- Samsung SDI secured its inaugural long-term electric vehicle battery supply agreement with Mercedes-Benz
- The partnership involves high-nickel NCM battery technology for upcoming compact and midsize electric SUVs and coupes
- Industry analysts estimate the agreement’s value at over 10 trillion won (approximately $6.8 billion), with delivery volumes reaching tens of GWh
- Shares of Samsung SDI climbed 4.87% following the announcement, while Mercedes-Benz stock declined 2.49%
- Mercedes-Benz now joins BMW and Volkswagen on Samsung SDI’s roster of European automotive partners
Samsung SDI finalized its inaugural battery supply partnership with Mercedes-Benz during a Monday ceremony in Seoul, propelling shares upward by 4.87%. Senior leadership from both corporations attended the formal signing event.
The agreement centers on high-nickel nickel-cobalt-manganese (NCM) battery technology. According to Samsung SDI, this chemistry provides superior energy density, extended driving range, enhanced durability, and robust performance capabilities.
Mercedes-Benz intends to integrate these batteries into forthcoming compact and midsize electric SUV and coupe offerings. Sources within the industry indicate the batteries are designated for an electric vehicle model scheduled for 2028 launch.
While Samsung SDI refrained from publishing official financial terms, industry insiders estimate supply quantities in the tens of gigawatt-hours, with the overall contract value projected to surpass 10 trillion won — equivalent to roughly $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.
Building Momentum Through Strategic Dialogue
This collaboration represents the culmination of extended negotiations. Samsung Electronics Chairman Lee Jae-yong had been cultivating stronger connections with Mercedes-Benz over an extended period.
Last November, Kallenius traveled to South Korea and convened with Lee at Samsung’s exclusive guest facility in Seoul. Their discussions explored potential synergies spanning automotive electronics and battery solutions.
The initiative gained traction when Lee journeyed to Germany alongside Samsung SDI President Choi for direct negotiations with Mercedes-Benz executives.
Samsung’s pre-existing commercial relationship with Mercedes-Benz provided solid groundwork for the battery partnership. Samsung’s Harman division currently provides infotainment systems and premium audio technology to the German automaker.
For Mercedes-Benz, this agreement expands a procurement network that already encompasses Korean battery manufacturers LG Energy Solution and SK On. The automaker has strategically diversified its battery sourcing channels in preparation for its next-generation electric vehicle portfolio.
Strategic Implications for Samsung SDI
The partnership extends Samsung SDI’s European automotive portfolio, which now encompasses Mercedes-Benz alongside existing relationships with BMW and Volkswagen.
Samsung SDI emphasized that the batteries would incorporate the company’s exclusive safety technologies, positioning this as a crucial competitive advantage in securing the contract.
Beyond the immediate supply commitment, both organizations expressed intentions to broaden their collaboration into joint research and development of advanced battery technologies and innovative mobility platforms.
“This alliance merges the pioneering spirit of two industry leaders,” stated a Samsung SDI representative.
Mercedes-Benz characterized the partnership as guaranteeing “a reliable supply of premium battery technology, an essential element of the company’s electric vehicle transformation.”
The substantial order is anticipated to strengthen Samsung SDI’s financial performance and optimize manufacturing capacity utilization. The multi-year agreement targets production for Mercedes-Benz’s 2028 electric vehicle range.
