Leading South Korean battery manufacturer Samsung SDI Co. is expanding its cylindrical battery production facilities to supply Tesla Inc. and other electric car manufacturers with its goods. On Thursday, people who know the situation said that the Samsung Group’s battery-making unit is now extending production lines producing smaller batteries at its Cheonan facility, some of which will be transformed into pilot facilities to create bigger batteries for electric cars.
Samsung SDI is testing two different kinds of big, cylindrical batteries. According to the sources, one is the 4680 battery, which is 46 mm in diameter & 80 mm long, while the other is the same size but is more extended.
Samsung Electric Car Battery Overview
The business will be able to reduce manufacturing costs by producing both varieties with slight modifications to the production processes, they said. According to the sources, Samsung will begin creating battery prototypes within the first half of next year and begin scale production in 2025.
The 4680 cell produced internally by Tesla, the leading producer of electric vehicles and user of lithium-ion batteries, is used in its EV models. Still, as it ramps up EV manufacturing, it is looking to get more of the kind from other vendors. Observers in the industry said that Samsung SDI’s 4680 appearance is for Tesla, but the company also intends to produce alternative lengths to appeal to consumers outside Tesla.
Additionally, the business produces prismatic cells because of its international customers, such as BMW of Germany. According to industry insiders, Samsung will likely give BMW its 46xx cylindrical batteries. The 4680 type is regarded as a play in the battery business since it is believed to enhance heat capacity by five times, output by six times, and the mileage of electric cars by an average of 16% compared to the traditional 2170 type.
After LG Energy Solution Ltd., Samsung’s crosstown rival, said earlier this week that it would invest 580 billion ($451 million) to produce battery cells for Tesla, Samsung has announced plans for large-size cylindrical batteries. Panasonic Holdings Corp. and other battery manufacturers are vying for orders from Tesla and 4680 batteries.
In its factory in Fremont, California, Tesla makes roughly 1 million 4680 battery cells, although this amount is known to fall well short of the demand. Samsung SDI’s share of the global battery industry has been declining as it has trailed behind its competitors in constructing new battery plants.
Samsung has a 4% percent of the battery market in the first four months of the year, down from a 5.8% share in the same time last year, according to market researcher SNE Research, placing it sixth overall.
At the end of April, Contemporary Amperex Technology Co. Ltd. (CATL), the largest battery manufacturer in the world, had a 33.7% market share, followed by LG Energy with a 14.9% share and China’s BYD with a 12.1% share. Analysts predicted that if Samsung successfully created the next-generation cylindrical batteries, it could increase its market share in the battery industry.
Nickel, cobalt, and aluminum cathodes are reportedly used in Samsung’s 4680 battery (NCA). Shares of Samsung SDI closed Thursday’s trading session at 549,000 won, up 4%, outpacing the 0.2% increase in the Kospi market.