Stellantis and Samsung to Build $2.5 Billion Battery Factory in Indiana
Stellantis and Samsung will build a $2.5 billion battery plant in Indiana as Chrysler and Fiat’s parent group accelerates its shift to electric vehicles in the United States after falling behind peers.
The facility is expected to open in 2025 and would be Samsung’s first battery manufacturing site in the United States. The investment follows recent deals by the company’s South Korean rivals, including LG Energy Solution and SK On, to open US joint ventures with global automakers.
Stellantis, the world’s fourth-largest automaker, which was formed last year by the merger of Fiat Chrysler and France’s PSA Peugeot, wants to sell 5 million electric vehicles a year by 2030. The company hopes that the vehicles will fully electric vehicles will represent half of its North American vehicles. truck sales and to only sell electric passenger cars in Europe on that date.
The new plant was announced after Stellantis and LG Energy Solution announced a $4.1 billion joint venture in March to build an electric vehicle battery plant in Canada.
“Stellantis has been lagging in its shift to electric vehicles, compared to GM and Ford, while Samsung has also lagged domestic rivals in expanding the electric vehicle battery business. Both are trying now to catch up,” said Lee Hang-koo, an adviser at the Korea Institute of Automotive Technology.
Carlos Tavares, chief executive of Stellantis, warned this month that automakers will struggle to get enough batteries over the next three to four years as they rush to roll out electric vehicles. He also warned of the industry’s heavy reliance on Asia for the battery supply chain.
Lee estimated that nearly 2 million electric vehicles were sold globally in the first quarter, accounting for more than 10% of new vehicle sales. “The surge in electric vehicle sales is raising concerns that the supply of electric vehicle materials may be falling short of demand, which could lead to shortages of electric vehicle batteries,” he said. .
South Korean battery makers have increased their investment in chemicals and materials used in electric vehicle batteries to reduce their reliance on China, the world’s largest processor of most minerals necessary for the production of batteries.
US states and municipalities have worked hard to attract investment, giving companies huge financial incentives to develop facilities. Chipmaker Intel said it would spend more than $20 billion on a manufacturing “mega-site” in Ohio.
General Motors announced a plan days later to invest $7 billion in its home state of Michigan to convert a plant to electric vehicle production and establish a battery plant.
Ford will focus its electric vehicle building in the southern United States, saying late last year it would spend $11 billion on assembly and battery plants in Tennessee and Kentucky. The company aims to produce 600,000 electric vehicles a year by the end of 2023 and decided in March to split its EV division and its traditional automotive business.
The Stellanits and Samsung facility will initially have an annual generation capacity of 23 gigawatt hours, which will be increased to 33 GWh. The investment will create 1,400 jobs in Kokomo, home to Stellantis’ engine and transmission plants, and could reach $3.1 billion.