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Samsung SDI Makes Strategic Shift to Boost European Battery Production

Samsung SDI, a South Korean conglomerate, is bolstering its production capabilities in Europe with plans to introduce next-generation cylindrical batteries, the ’46 Pi’ product. This particular battery, with a diameter of 46 mm and a height of 80 mm, often referred to as 4680, will be produced at their Goed plant in Hungary, following further investments in the site.

This move signals a shift in Samsung SDI’s strategic outlook, previously perceived as somewhat hesitant towards battery investment. The change is epitomised by their 2021 investments, which exceeded 2 trillion won ($1.5 billion), a stark contrast to previous years. The momentum was further stoked by last year’s meeting between Chairman Lee Jae-yong and BMW’s Chairman, Oliver Zipse, which led to more positive considerations towards battery production.

The company’s preparation to expand its Goed plant is reportedly well underway, with construction planned for the latter half of this year. Industry experts suggest that foundational work on civil engineering and electrical infrastructure could commence as soon as Q4. This expansion, dubbed internally as ‘Stage 2’, aims to enlarge the Göde 2 Factory.

The facility’s new production line will likely consist of two stages. The initial investment is projected to be around 500 billion won ($386 million), contributing to a capacity of about 10 gigawatt hours (GWh). While the specific client for the new 46-pi battery remains under wraps, industry analyses point towards BMW as the most probable customer. The German automaker had previously requested a 46120 battery from Samsung SDI and is currently constructing an EV-dedicated factory in Debrecen, Hungary, a mere three-hour drive from Goed.

The battery industry anticipates Samsung SDI to manufacture at least two variants of the 46-pi battery – the 4695 and 46120, including the Tesla-targeted 4680. The increased heights of the 4695 and 46120 have gained prominence recently as viable alternatives, due to the 4680’s underwhelming performance. This switch is seen as a consideration for productivity and energy density.

A source from within the industry stated that Samsung SDI’s approach would first involve the development and mass-production of the 4680 batteries, before integrating the 4695 and 46120 batteries at a later stage. However, it’s worth noting that Samsung’s expansion in Malaysia has experienced delays, setting them three months behind schedule.

Concurrent with the European cylindrical battery production, Samsung SDI is also planning to source its workforce from the Philippines, replacing European workers. Their Hungarian subsidiary has collaborated with the Philippine Overseas Employment Agency (POEA) to facilitate Filipino employment in Hungary.

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