Samsung unit in BMW battery deal

Samsung SDI plans to supply batteries for the German carmaker’s electric vehicle i3 model from its plant in China, in a move to diversify its markets after facing a setback in the world’s largest electric vehicle market.
“Some of the EV batteries from Samsung SDI’s plant in Xian will be used for the BMW i3 next year,” a source said.
This is the first time the German company use batteries produced in Samsung’s plant in China. They have been produced from the technology’s giant’s Ulsan plant in South Korea.
“BMW officials visited the Xian plant to audit the place in the second quarter after signing an agreement with Samsung SDI,” the source added.
South Korean battery makers Samsung SDI and LG Chem have been diversifying markets for their plants in China, whose operating rates dropped to as low as 20 per cent last year after repeatedly being left out from the Chinese government’s subsidies. They were again left out from the subsidies in July, apparently due to China’s retaliation against South Korea for its deployment of a US anti-missile system and the Chinese government’s drive to foster the local battery industry.
In July, a Samsung SDI executive said in a conference call that the operating rate of the Xian plant would be normalised in 2018 due to rising demand for energy storage systems and the shifting of its markets to Europe.
The company is also slated to produce batteries for German automaker Volkswagen’s e-Golf in the Xian plant later this year, according to industry watchers.
LG Chem is also taking a similar strategy by shifting its assembly lines to energy storage systems and shipping electric vehicle batteries to other Asian and European markets.
The company said the operating rate in the Nanjing plant was raised up to 70 per cent through the diversification.
LG Chem is also reportedly reviewing a pilot production of Volvo’s electric cars in its Nanjing plant.
China’s electric vehicle market has grown over the past years to become the world’s largest, but its volume of imported South Korean batteries has dropped. Its imports of South Korean batteries declined to US$1 billion last year from US$1.5 billion in 2012, according to data released by the state-run Korea Trade-Investment Promotion Agency.