Samsung SDI will supply electric vehicle (EV) batteries to Mercedes-Benz in Germany for the first time. The contract was signed five months after Samsung Electronics Chairman Lee Jae-yong and Mercedes-Benz Chairman Ola Källenius met in November last year. With this supply agreement, Samsung SDI will supply batteries to all three major German automakers—BMW, Volkswagen, and Mercedes-Benz.

● Chairman Lee Jae-yong directly secured the contract

Samsung SDI announced on the 20th that it had signed a multi-year contract to supply EV batteries to Mercedes-Benz. Samsung SDI is scheduled to supply high-performance batteries that will be installed in Mercedes-Benz’s next-generation electric vehicles. These are high-nickel nickel-cobalt-manganese (NCM) batteries that achieve high energy density. Samsung SDI stated, “The batteries to be supplied to Mercedes-Benz not only maximize driving range but also have strong advantages in lifespan and output.”

The specific terms of the contract were not disclosed. However, the battery industry expects that, given the multi-year supply, the contract size will reach several trillion KRW. Full-scale supply is projected to begin in two to three years. Mercedes-Benz plans to equip its upcoming small and mid-sized electric sport utility vehicle (SUV) and coupe models with Samsung SDI batteries.

The background to Samsung SDI securing Mercedes-Benz as a client this time is reported to include a significant role played by Chairman Lee, who took the lead personally. In November last year, Lee, together with Samsung SDI President and CEO Choi Joo-sun, held a dinner meeting with Källenius at the Samsung Group’s VIP guesthouse Seungjiwon in Yongsan-gu, Seoul, to discuss cooperation plans for future mobility. It is also known that in March this year, Lee and Choi traveled to Europe and met with Mercedes-Benz.

On the occasion of this battery supply contract, Mercedes-Benz also announced that it would discuss next-generation all-solid-state batteries with Samsung SDI. At a press conference held at Andaz Seoul Gangnam in Gangnam-gu, Seoul, Källenius said, “All-solid-state battery technology is a very exciting technology, and we are in discussions with partners such as Samsung SDI,” emphasizing, “We will expand our partnerships with Korean companies.”

● ‘K-batteries’ counterattack amid Chinese onslaught

This latest order for Samsung SDI is meaningful in that it once again demonstrates the competitiveness of “K-batteries” amid an intense onslaught from Chinese companies. In the current global EV battery market, the positions of the three Korean battery makers—LG Energy Solution, Samsung SDI, and SK On—are weakening.

According to market research firm SNE Research, in the EV markets of the United States, Europe, and other regions excluding China, the combined market share of the three Korean companies in January–February this year was 28.3%, down 8.8 percentage points from 37.1% in the same period a year earlier. In contrast, over the same period, the combined share of China’s CATL and BYD increased from 36.7% to 44.2%, up 7.5 percentage points.

Recently, however, Korean companies have begun full-scale commercialization of cost-effective lithium iron phosphate (LFP) batteries, which had been virtually the exclusive domain of Chinese firms. A representative example is LG Energy Solution’s order for LFP batteries worth about KRW 2 trillion from Mercedes-Benz at the end of last year. On this day, Mercedes-Benz officially confirmed the contract, stating that “LG Energy Solution has been selected as an LFP battery supplier,” alongside the announcement of the Samsung SDI battery order.

Other overseas automotive brands besides Mercedes-Benz are also increasingly choosing Korean batteries over Chinese ones. At a recent press conference unveiling its new models, the Polestar 3 and Polestar 5, Polestar said it “plans to use LG Energy Solution’s ternary batteries.” Nicolas Paris, CEO of Renault Korea Motors, likewise announced that the company would establish a domestic supply chain for EV batteries. An automotive industry insider said, “As European automakers respond to the low-price offensive from Chinese competitors by expanding their lineups of premium EVs, demand for technologically advanced Korean suppliers is increasing.”

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