Key Highlights
- Samsung SDI finalized its inaugural long-term electric vehicle battery supply contract with Mercedes-Benz
- The cells will utilize advanced high-nickel NCM technology designed for upcoming compact and midsize electric vehicles
- Industry analysts estimate the agreement’s total value at over 10 trillion won (approximately $6.8 billion), spanning tens of gigawatt-hours
- Samsung SDI shares climbed 4.87% following the announcement; Mercedes-Benz stock declined 2.49%
- Mercedes-Benz joins BMW and Volkswagen on Samsung SDI’s expanding European client roster
Samsung SDI concluded its inaugural battery supply contract with Mercedes-Benz on Monday, propelling its share price upward by 4.87%. Company leaders from both organizations gathered in Seoul for the official signing ceremony.
The battery cells will incorporate advanced high-nickel nickel-cobalt-manganese (NCM) technology. According to Samsung SDI, this formulation provides superior energy density, extended driving range, enhanced durability, and robust power performance.
Mercedes-Benz intends to integrate these batteries into its forthcoming lineup of compact and midsize electric SUVs and coupe variants. Industry insiders suggest the cells are designated for a new electric vehicle model slated for 2028 release.
Samsung SDI refrained from publicly announcing the contract’s monetary value. Nevertheless, industry analysts estimate supply quantities reaching tens of gigawatt-hours, with the overall agreement expected to surpass 10 trillion won — approximately $6.8 billion.
The Seoul ceremony featured Samsung SDI President and CEO Choi Joo-sun, alongside Mercedes-Benz Group Chairman Ola Kallenius and Chief Technology Officer Jorg Burzer.
Long-Standing Collaboration Efforts
The strategic alliance represents years of relationship building. 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 met with Lee at Samsung’s executive guest facility in Seoul. Their discussions centered on potential collaboration opportunities spanning automotive electronics and battery technologies.
The partnership gained traction after Lee journeyed to Germany accompanied by Samsung SDI President Choi for direct negotiations with Mercedes-Benz leadership.
Samsung’s pre-existing commercial relationship with Mercedes-Benz provided solid groundwork for the battery agreement. Samsung’s Harman division currently provides the German automaker with infotainment systems and premium audio solutions.
For Mercedes-Benz, this partnership diversifies a supply chain already featuring Korean battery manufacturers LG Energy Solution and SK On. The automaker has been strategically expanding its battery procurement network in preparation for its next-generation electric vehicle portfolio.
Strategic Implications for Samsung SDI
This contract positions Mercedes-Benz alongside existing European partners BMW and Volkswagen in Samsung SDI’s customer portfolio.
Samsung SDI emphasized that the batteries will incorporate its exclusive safety innovations, which the company positioned as a significant competitive advantage in securing the partnership.
Beyond the immediate supply arrangement, both organizations announced intentions to broaden their collaboration to encompass joint research and development of advanced battery technologies and innovative mobility solutions.
“This partnership brings together the innovative DNA of both companies,” a Samsung SDI official said.
Mercedes-Benz described the deal as ensuring “a stable supply of high-performance battery technology, a critical component of the brand’s electrification strategy.”
The substantial order is projected to enhance Samsung SDI’s revenue streams and manufacturing capacity utilization. The multi-year contract will support production aligned with Mercedes-Benz’s 2028 electric vehicle product launch.
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