Samsung SDI sees battery demand growth accelerating

Samsung SDI sees battery demand growth accelerating

August 1, 2019
Press Release: Samsung SDI

South Korean battery producer Samsung SDI sees demand for its products accelerating in this year’s second half as automakers gear up to introduce new electric vehicles (EVs) and domestic sales of energy storage systems (ESS) rebound

Samsung SDI expects huge increases in sales and improved profitability as automakers prepare to roll out new and redesigned EVs and plug-in hybrid electric vehicles, according to executive vice-president Kwon Young-no. The company sees similar gains in ESS sales through to the end of the year, as the South Korean market returns to normal and renewables projects in the USA and Europe spur overseas demand

Samsung SDI sees ESS exports accounting for 80-90% of its unit sales within a few years, up from 50% currently. The South Korean ESS market may stagnate in the years ahead rather than grow rapidly because the country’s government plans to reduce renewable energy credits that are given to power producers for using such systems, effective next June. But global ESS demand will rise by 30-35% a year through at least 2025, said Samsung SDI senior vice-president for battery marketing Michael Son.

Demand for EV batteries is growing even faster. Rival South Korean battery producer LG Chem said last week that global demand for EV batteries will rise almost fivefold by 2024 to 569GWh. Battery producers also are rapidly increasing production capacity, but Son said he sees no short-term risk of a market glut. “Capacity is growing in line with the supply schedule and volume for each project, so I don’t think we need to worry about excess supply at this point,” he said.

South Korean battery producers have been largely shut out of China, the world’s biggest EV market, because the Chinese government has excluded cars equipped with their power packs from qualifying for generous subsidies. Son said Samsung SDI also is looking at expansion opportunities in China but for now, it will rely on its two existing plants in the country and carefully monitor the project status of its customers because “there are so any factors related to entering the Chinese market”.

Samsung SDI’s second-quarter battery sales rose by 5.4% from a year earlier to 1.82 trillion won (US$1.54bn).

The company also targets double-digit percentage growth in sales of cylindrical batteries. The US-China trade war has slowed demand for small lithium-ion batteries used in electronics, Samsung SDI said, but further adoption of the technology in larger devices, such as vacuum cleaners and big power tools, will keep sales rising. The company sees global demand for cylindrical batteries rising to 10 billion cells in 2025 from an estimated 5.5 billion cells this year.

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