Samsung SDI boosts growth of its Hungarian production facility through a 1.6 trillion Korean won capital enhancement

Samsung SDI, a leading global battery supplier, has announced a major expansion and renovation of its Hungarian factory. The move comes as automakers are increasing sales of electric vehicles (EVs) and accelerating their launch of affordable EV models to avoid stringent carbon emission regulations in the European Union (EU).

The EU has been regulating the average carbon dioxide emissions of new cars to 93.6g per kilometer since January, and the European market is experiencing a rapid increase in EV sales as a result. This regulatory push has prompted automakers to focus on EV sales to avoid hefty fines for non-compliance.

Samsung SDI's Hungarian factory, established with an investment of over 2 trillion won, is the company's core base in Europe. The factory currently produces two versions of prismatic batteries, with new supply contracts primarily focused on stacked batteries. In response to the growing demand, Samsung SDI plans to transform the factory into a dedicated production facility for prismatic batteries using the stacking method.

To finance this expansion, Samsung SDI has successfully raised 1.65 trillion won through a capital increase. Of this amount, 323.6 billion won will be invested in the Hungarian factory. The expansion is to supply prismatic batteries for Hyundai and Kia's European EVs, securing an opportunity to supply batteries for about 500,000 vehicles to these automakers in Europe by 2032.

In addition to its partnership with Hyundai and Kia, Samsung SDI has automotive customers in Europe starting from 2023, including cooperation with companies like Tesvolt for energy storage solutions. However, specific European automobile manufacturers named as Samsung SDI customers from 2023 are not explicitly listed in the available data.

The industry official stated that Europe's carbon emission regulations could be an opportunity to overcome the chasm in the market, and Samsung SDI's expansion is a testament to this belief. The company's rapid sales growth is also expected due to securing additional customers like BMW and Volkswagen in Europe.

In conclusion, Samsung SDI's expansion of its Hungarian factory is a strategic move to meet the growing demand for EV batteries in the European market. The company's investment in the factory's transformation into a dedicated production facility for prismatic batteries using the stacking method is expected to strengthen its position as a major battery supplier in Europe.