Samsung SDI, a leading supplier of lithium ion batteries, has signed a memorandum of understanding to build a car battery factory in Shaanxi Province, China in efforts to expand its presence in what would grow to be the world's largest market for electric cars.
Under the agreement - signed with Shannxi Province and Anqing Ring New Group - Samsung SDI will set up a joint venture with its partners by April, and invest about $600 million over the next five years.
Samsung SDI aims to start production at the factory next year, and plans to develop it into the hub of car battery production in China. Anqing Ring New Group is also a leading Chinese company in auto parts such as engine pistons and cylinders, and great synergies are expected when combined with Samsung SDI's world-leading battery technology.
With the latest agreement, Samsung SDI "gained a foothold in executing its strategy targeting the world's largest electric car market," said Sangjin Park, President and CEO of Samsung SDI. "We will use the opportunity to grow into the world's No. 1 company not only in small-sized batteries, but also in the medium- and large-sized battery segments."
China has become the world's largest automotive market in 2009. And as part of a recently announced plan, the Chinese government aims to provide 5 million electric vehicles (EV) and plug-in hybrid electric vehicles (PHEV) by 2020.
Source and top image: Samsung