Samsung SDI To Acquire Magna’s Battery Division

MAR 11 2015 BY MARK KANE 12

Samsung SDI battery cells

Samsung SDI battery cells

Samsung SDI, lithium-ion battery manufacturer and supplier to BMW electric cars, announced the acquisition (pending regulatory approvals) of the entire battery pack business from Magna Steyr, an Austria-based operating unit of Magna International (including all 264 employees, production and development sites and existing contracts of the business).

Financial terms of the deal weren’t disclosed.  The whole acquisition process should be completed in a few months.

Samsung SDI will be then be able to offer not only battery cells, but whole packs for automotive use.

“Samsung SDI Co. Ltd. (KRX:006400), a global leader in energy solutions and electronic materials, has agreed to acquire the battery pack business of Magna International, a leading global automotive supplier.

The acquisition is expected to enhance Samsung SDI’s capabilities in batteries for electric vehicles by combining the company’s established leadership in battery cells and modules with Magna’s expertise in battery packs.

Magna’s advanced technology and experience in providing global automakers with battery packs will also help Samsung SDI secure customers in the fast-growing automotive battery markets in Europe, North America and China.”

Namseong Cho, President and CEO of Samsung SDI stated:

“The acquisition is a key strategic step for Samsung SDI to strengthen the competitiveness of our automotive battery business. It will provide new momentum to expand our business and customer base.”

In the end of press release we see that Samsung SDI is bullish on the future of electrification, expecting strong growth of sales:

“The global market for electric vehicles, including hybrid and plug-in hybrid models, is forecast to reach 7.7 million vehicles by 2020, compared with 2.1 million in 2014, according to research firms B3 and IHS.”

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12 Comments on "Samsung SDI To Acquire Magna’s Battery Division"

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Glad to see various battery makers are getting serious about making EV battery packs, and I hope getting serious means they are building the capacity to produce them in high volumes. If Tesla’s Gigafactory is the only battery factory producing very large amounts of kWh of batteries, then no other EV maker will be able to make a long-range EV in numbers to rival a popular gas guzzler.

I remain quite skeptical that any legacy auto maker actually plans to challenge Tesla in producing a long-range (150+ miles) EV in large numbers within the next 4-5 years, if not longer. But it is gratifying to at least see a few battery makers taking steps to get ready in case one or more auto makers actually decide to do so.

You can say that SDI is bullish on batteries or you can say Magna is bearish. Would really depend on the price, though it’s hard to see Magna exiting a business that it thought would be a growth engine.

The whole rap on “legacy” automakers is getting old. Total BS. Nissan has sold way more EVs than Tesla and has hit the market hard. Maybe too hard for what it had to offer. BMW is definitely working on it, and GM has both the Volt and will have the Bolt (the Volt is the only plug-in other than the Model S that you can buy in any state). You can say the marketing efforts have been inept but you can’t say the effort has been lacking.

At some point everyone will have to accept the fact that manufacturers really do need to produce cars that will sell.

Recall that currently EVs (including PHEVs) are only ~0.5% of the new cars sold in the past year (and much less as a % of all cars on the road)… Aside from Tesla which is a pure-BEV play, we can’t realistically expect the automakers to bet the farm on EVs by building huge factories; it makes sense that battery vendors will do this.

That’s why progress is gradual, and there’ll likely be more PHEVs than BEVs to begin with. Things will accelerate rapidly once marketshare is 3-4%, which in turn will happen when we get the 200mi BEVs (and of course cheaper 60mi AER PHEVs) in two years, and charigng infrastructure has progressed a bit more.
I expect that 3-4% will happen around 2020, and a year or two beforehand it’ll be clear that EVs are here to stay as a major market, enough so there’ll be huge battery-production investments.

They may feel it is a growth business but it will be a VERY difficult business with razor thin margins. It is not going to be easy to compete with the Gigafactory and massive factories in the far-east.

Full credit to Nissan for marketing the first truly mass-produced BEV. Full credit to Nissan for following this up by building factories in Tennessee and the UK to increase production of battery packs and Leafs, to actually meet worldwide demand.

But then they failed to follow up on this by increasing the range of the Leaf. It’s well known that surveys show a psychological tipping point of 100 miles of EV range, below which most drivers won’t even consider buying an EV. Nissan advertises the Leaf as a “100 mile EV”, but the average real-world range is somewhere around 75-80 miles.

Nissan’s internal debate over whether or not to shutter its battery factories, in favor of buying a new generation of batteries from a third party, also make it at least questionable that it’s really committed to building BEVs in large numbers. Nissan was supply limited in building its Leafs for the first few years, because of a bottleneck in battery supply. If they shutter their factories, they’ll be -voluntarily- putting themselves back into the same position.

Nissan was serious about dipping a toe, and then one foot, into the EV revolution. But they have failed to actually wade in.

I think Nissan’s failure has been on the technical side, not the commitment from management.

If Nissan had their “double density” battery cells completed by 2014 (like was originally planned), we would see a different EV market right now. Nissan missed on both the technical capability and target cost of their internally developed cells. They are still trying to recover from the swing and miss.

The whole notion that Nissan is doing more than Tesla to electrify the automobile it total bovine feces. Nissan continues to relegate the BEV to the green car ghetto and will not make a BEV that is competitive with comparably priced ICEv until Tesla forces them to do so.

In 2014 Panasonic sold 2726 MWh of lithium-ion batteries to Tesla. AESC (Nissan-NEC JV) sold 1620 MWh to Nissan. LG-Chem sold 886 MWh to various partners,GS Yuasa sold 451 MWh to Mitsubishi, and Samsung SDI sold 314 MWh to BMW.

Tesla is producing fully electric cars that replace ICEv. Everyone else is producing city cars that are secondary vehicles or primary vehicles to the most ardent environmentalist or producing half assed PHEVs.

They did a lot by introducing the LEAF. And they did a lot by cost-reducing down a few thousand bucks.

But since then, they’ve really stagnated. They haven’t even bothered to bring over the eNV-200 to the USA.

C’mon Nissan . . . from you we need:
-Bring over the eNV-200
-Release a high end Infiniti EV
-Build a LEAF with a larger battery pack
-Introduce another body model of some type (CUV, mini-van, truck, sedan, whatever).

Yeah.. but we know that Nissan is building a new Leaf with double the range and a more “contemporary” body style. Should be out in a year or two. I bet they double or quadruple sales at that point.

Tesla’s cars are nothing more than a halo for the industry because very few people can afford them. The bulk of EV sales are going to come from regular manufacturers.

A ~150 mile Leaf would certainly increase demand quite a bit. But can Nissan really increase production to meet a four-fold (or perhaps as much as ten-fold) increase in demand, even if it wants to? Where are the batteries going to come from? Nissan has sharply reduced the output of its battery factories, and there’s an internal debate over whether or not to shutter them.

Nobody, but -nobody- is building up battery production capacity like Tesla is. Not the EV makers, and as far as I can tell, not even all the battery makers in the world put together. Nobody.

Nobody but Tesla is serious about building long-range BEVs in numbers to rival even one best-selling gas guzzler.

“The competition out there is a joke. Tesla’s cars DO NOT compete against other electric cars. First off, the electric cars out there are not remotely in the class of Tesla’s vehicles. Second, Model S (and the coming MX, M3) are aimed at the best-in-segment ICE cars and there is absolutely NO indication any ICE carmaker intends to cannibalize their highest margin, most successful ICE product by offering similarly competitive high-end, high performance BEVs.” –Randy Carlson

You think demand would go up by 4X?

I’d guess an uptick more like 20% more sales. Remember, more battery is going to raise the price that is already much higher than gas models. And gas is super expensive these days.

I certainly hope they are working on that but we haven’t heard much from them. Then again, they probably don’t want to say much to avoid “The Osborne Effect” that has dragged down Volt sales.