Stellantis and Samsung SDI officially announced binding, definitive agreements related to the joint venture battery manufacturing facility in the US.
The investment, first announced in October 2021, is estimated at over $2.5 billion (€2.3 billion) with a potential of a gradual increase up to $3.1 billion (€2.9 billion).
The battery gigafactory will be built in Kokomo, Indiana, where Stellantis already has three plants (engine, casting and transmission), and result in about 1,400 new jobs.
Plant construction activities are scheduled to begin later this year, while the production is expected to start in the first half of 2025.
The factory will have an initial manufacturing capacity of 23 GWh annually - in line with the original announcement - while the target is to increase the output to 33 GWh "in the next few years." Actually, it seems that there is a potential for higher volume, but it depends on demand:
"The total capacity would increase further as demand for Stellantis electric vehicles is expected to rise."
The batteries from Kokomo, Indiana will be transported and used "in a range of vehicles produced at Stellantis’ North American assembly plants." The company does not reveal details about which models or segments.
The investment is a very important especially for Samsung SDI, which has a chance to significantly expand its business in the US, following LG Energy Solution and SK Innovation's SK On:
"At the Indiana factory, Samsung SDI will be applying its cutting-edge technology PRiMX to producing EV battery cells and modules for the North American market."
According to Stellantis' Dare Forward 2030 strategic plan, the group expects that its annual battery electric vehicle sales will reach 5 million annually by 2030 (100% of passenger car BEV sales mix in Europe and 50% of passenger car and light-duty truck BEV sales mix in North America).
To support its ambitions, the company has increased forecasted battery demand by 140 GWh to 400 GWh/year (which translates to 80 GWh per vehicle if we combine it with 5 million BEVs). The plan is to build 5 battery gigafactories (joint ventures) and continue to buy batteries from external battery suppliers.
The long-term electrification strategy of Stellantis will require investments estimated at $35 billion (€30 billion) through 2025 (electrification and software globally).
Carlos Tavares, CEO of Stellantis said:
“Just under one year ago, we committed to an aggressive electrification strategy anchored by five gigafactories between Europe and North America. Today’s announcement further solidifies our global battery production footprint and demonstrates Stellantis’ drive toward a decarbonized future outlined in Dare Forward 2030. I am grateful to Governor Holcomb and Secretary Chambers along with Mayor Moore, and their teams as well as to all my colleagues for their support and dedication to bring this operation to Kokomo, a city that holds a rich and long history for our company.”
Yoonho Choi, chief executive officer of Samsung SDI said:
“We express our gratitude towards officials from the State of Indiana and Stellantis for supporting the final selection of the plant site in Indiana. We have secured a solid foothold in a rapidly growing North American EV market through the joint venture with Stellantis. We will make sincere efforts to bring satisfaction to the market with top-class quality products in the future, and we will contribute towards meeting the climate change target.”
Stellantis and Samsung SDI's JV in brief:
- joint venture
- location: Kokomo, Indiana
- investment: $2.5 billion (€2.3 billion) initially
could gradually increase up to $3.1 billion (€2.9 billion)
- construction start: late 2022
- production start: H1 2025
- output: initially 23 GWh of lithium-ion battery cells and modules annually with an aim to increase up to 33 GWh/year in the following years (potentially more, depending on demand)