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Samsung SDI and Stellantis this week have agreed to invest more than $2.5 billion in an electric vehicle (EV) battery plant in the car manufacturing rustbelt of the U.S. as the nation’s automobile industry starts to electrify.
Slated to start production in 2025, the Kokomo, Ind., plant will have an initial annual production capacity of 23 gigawatt hours (GWh), with an aim to increase to 33 GWh in the next few years.
The total investment would increase to as much as $3.1 billion if demand for Stellantis EVs takes off. Stellantis CEO Carlos Tavares said in an interview with CNBC that he expects a shortage of EV batteries to emerge during the 2024–2025 period, accentuated by scarcities of raw materials for batteries that will slow adoption of EVs by the 2027–2028 timeframe.
“Just under one year ago, we committed to an aggressive electrification strategy anchored by five gigafactories between Europe and North America,” Tavares said in a press statement on the Indiana joint venture. “Today’s announcement further solidifies our global battery production footprint and demonstrates Stellantis’ drive toward a decarbonized future.”
The Indiana EV battery joint venture comes at the same time as the world’s largest electronics contract manufacturer, Foxconn, agreed to revamp a plant in the neighboring state of Ohio for production of electric trucks.
Foxconn agreed this month to buy the former General Motors factory in Lordstown, Ohio, for $230 million. The Taiwanese company, which is considered the largest manufacturer of iPhones for Apple, plans to build EVs for clients that include electric truck maker Fisker.
The battery plant is projected to create 1,400 new jobs in Kokomo and surrounding areas. Tavares called Kokomo a city that holds “a rich and long history for our company”. Stellantis, which makes Chrysler, Dodge, and Ram vehicles in the U.S., last year announced plans to spend nearly $230 million to retool three factories in the city to make transmissions that can be used with gas–powered engines, as well as hybrid systems.
Samsung SDI will provide battery and electronic materials technologies as a member of the joint venture with Stellantis.
“We have secured a solid foothold in a rapidly growing North American EV market through the joint venture with Stellantis,” said Yoonho Choi, CEO of Samsung SDI. We will contribute towards meeting the climate change target.”
Samsung SDI will use its PRiMX technology to produce EV battery cells and modules for the North American market. Samsung launched PRiMX as a premium battery brand and an industry first last year at CES 2022 in January.
As part of its Dare Forward 2030 strategy, Stellantis aims for global annual battery EV sales in 5 million vehicles by 2030, reaching 100% of passenger car sales in Europe and 50% passenger car and light–duty truck sales in North America. Stellantis also aims to increase battery capacity by 140 GWh to approximately 400 GWh, to be supported by five battery manufacturing plants together with additional supply contracts.
The announcement is part of the company’s long–term electrification strategy to invest $35 billion through 2025 in electrification and software globally.