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Samsung may provide batteries for Ford

February 28, 2014

By Kim Yoo-chul

Samsung SDI is negotiating with Ford Motor to supply batteries for advanced electric vehicles to be produced by the second-biggest U.S. automaker, an industry source said Friday.

“Samsung SDI is in talks with Ford to sell its rechargeable batteries for electric cars. The deal may be reached sometime in the first half of this year,” the source from one of Samsung’s technology affiliates told The Korea Times.

Officials from both Samsung SDI and Ford declined to comment.

The source said a deal with Ford will help Samsung SDI, an affiliate of Samsung Group, to win battery orders from other top automakers.

“The firm is actively approaching other U.S. automakers to secure a market for its batteries,” he said.

Samsung SDI may supply Ford with a small number of batteries first, and then increase shipments gradually because terms of their negotiations are subject to market conditions.

The talks are almost “75 percent complete” as they are narrowing differences on key conditions such as volume and price, the source said.

“If things go smoothly, Samsung will be able to start supplying the batteries next year.”

A spokeswoman at Ford Korea said she was not in a position to talk about battery-related issues.

“Because battery-related issues are being controlled by our headquarters, Ford Motor Korea has no authority to comment on this issue,” she said by telephone.

The deal comes as Ford is diversifying its battery-sourcing to firms other than LG Chem, Samsung SDI’s rival, as the U.S. automaker is pushing ahead with its electric vehicle business amid growing demand.

Currently, LG Chem is the top supplier for Ford, which uses lithium-ion batteries produced at the former’s plant in Holland, Michigan.

LG officials also refused to comment on the Samsung-Ford deal.

Some 100,000 electric vehicles were sold last year, globally, with Toyota of Japan leading the way, followed by Ford, according to data from the Korea Automotive Research Institute. Ford was the player that significantly increased it sales of electric vehicles.

Samsung is heavily investing in batteries as it has identified the business as one of its next cash-generators amid slowing sales of smartphones and televisions.

SDI is already supplying batteries for BMW’s i3 electric car. In January, SDI announced a plan to build its first car battery plant in China with a total investment of $600 billion over the next five years.