Stellantis and Samsung SDI's Joint Battery Plant: the EV Revolution in the US

On July 24, 2023, Stellantis and Samsung SDI announced plans to open their second joint battery plant in the United States. This comes just two months after the companies revealed their first joint factory would be built in Kokomo, Indiana. The rapid expansion underscores the ambitious electric vehicle (EV) goals of both automaker Stellantis and battery maker Samsung SDI.

Accelerating EV Production

With the new U.S. plant, Stellantis and Samsung SDI are gearing up for a major push into EVs for the North American market. Stellantis CEO Carlos Tavares said the "new facility will contribute to reaching our aggressive target to offer at least 25 new battery electric vehicles for the North American market by the end of the decade."

The companies are investing over $2.5 billion in the Kokomo, Indiana plant set to open in early 2025. The new plant announced on July 24 will start production in 2027 with an initial capacity of 34 GWh. Together, the two U.S. plants will allow Stellantis to rapidly electrify many models across its wide range of brands, including Jeep, Ram, Dodge, Chrysler, Fiat, Alfa Romeo, and Peugeot.

Securing Battery Supply

For Samsung SDI, the joint battery plants ensure a major automotive customer for its EV batteries. Stellantis has set a goal of securing around 400 GWh of battery capacity globally per year by 2030. The two U.S. factories, along with joint ventures in Canada and Europe, will help Stellantis reach that target. Samsung SDI CEO Yoon-ho Choi said the new plant "will accelerate our market penetration into the U.S."

Samsung SDI is competing against other Asian players like LG and CATL to supply batteries to automakers rapidly transitioning to EVs. Landing Stellantis, the world's 4th largest automaker, as a major customer helps cement Samsung SDI's position as a top EV battery maker.

Investing in U.S. Manufacturing

The new joint battery plant also reflects how automakers and their suppliers are localizing EV supply chains in the U.S. Stellantis is spending over $35 billion globally to boost EV production and software development through 2025. With battery costs making up a large chunk of EV expenses, it makes strategic sense for Stellantis to partner with Samsung SDI on U.S. battery production.

The new plant's location hasn't been announced yet, but Indiana and Michigan are likely contenders given their auto manufacturing history. Thousands of new jobs will also be created, helping drive the transition to EVs and electrification in the traditional heartland of U.S. auto manufacturing.

Pushing Toward an EV Future

Stellantis plans to hit 100% EV sales in Europe and 50% in the U.S. by 2030. With the global auto industry pivoting rapidly to electrification, the Samsung SDI partnership provides key battery supply and manufacturing capacity. As Tavares stated, the new joint plant will help Stellantis achieve its "aggressive target" for bringing 25 new EVs to the crucial North American market this decade.

Beyond Stellantis and Samsung SDI, other automakers like General Motors and Ford are also partnering with battery firms to build U.S. plants. The investments total tens of billions of dollars in the race to ramp up EV production. With consumer demand and government incentives accelerating the EV shift, joint ventures like Stellantis-Samsung SDI will be the new normal for an auto industry embracing electrification.