Stellantis and Samsung will build a $2.5bn battery plant in Indiana, as the parent group of Chrysler and Fiat accelerates its electric vehicles shift in the US after lagging behind its peers.
The facility is set to open in 2025 and would be Samsung’s first battery manufacturing site in the US. The investment follows recent deals by the company’s South Korean rivals, including LG Energy Solution and SK On, to open US joint ventures with global automakers.
Stellantis, the world’s fourth-largest automaker, which was formed last year through the merger of Fiat Chrysler and France’s PSA Peugeot, wants to sell 5mn EVs annually by 2030. The company hopes fully electric vehicles will represent half of its North American car and light truck sales and to sell only electric passenger cars in Europe by that date.
The new plant was announced after Stellantis and LG Energy Solution announced a $4.1bn joint venture in March to build an EV battery plant in Canada.
“Stellantis has been late in its shift to EVs, compared with GM and Ford, while Samsung has also fallen behind its domestic rivals in the EV battery business expansion. Both of them are now trying to catch up,” said Lee Hang-koo, an adviser at the Korea Automotive Technology Institute.
Carlos Tavares, Stellantis chief executive, warned this month that carmakers would struggle to obtain enough batteries in the next three to four years as they raced to roll out EVs. He also cautioned about the industry’s heavy dependence on Asia for the battery supply chain.
Lee estimated that nearly 2mn EVs were sold globally in the first quarter, accounting for more than 10 per cent of new vehicle sales. “The sharp increase in EV sales is sparking concern that EV material supply could fall short of demand, which could lead to EV battery shortages,” he said.
South Korean battery makers have increased investment in the chemicals and materials used in EV batteries to reduce their dependence on China, the world’s largest processor of most of the minerals needed for battery production.
US states and municipalities have worked hard to lure investment, granting companies considerable financial incentives to develop facilities. Chipmaker Intel has said it will spend more than $20bn on a manufacturing “mega-site” in Ohio.
General Motors announced a plan days later to invest $7bn in its home state of Michigan to convert a factory to EV production and establish a battery plant.
Ford will focus its EV buildout in the southern US, saying late last year that it would spend $11bn on assembly and battery plants in Tennessee and Kentucky. The company wants to produce 600,000 electric vehicles per year by the end of 2023 and decided in March to split its EV division and traditional auto businesses.
Stellanits and Samsung’s facility will initially have an annual production capacity of 23 gigawatt hours, which will be increased to 33GWh. The investment will create 1,400 jobs in Kokomo, home to Stellantis’s engine and transmission plants, and could increase to $3.1bn.