Battery maker Samsung SDI endures EV market headwinds in pursuit of planned investments

Participants in InterBattery 2024 take photos of Samsung SDI’s sample “All Solid Battery,” a solid-state battery, during the event at COEX in Seoul, March 6. Newsis

Q2 operating profit falters amid slowdown in EV demand

By Nam Hyun-woo

Samsung SDI said, Tuesday, that it plans to continue investing in increased production capacity and advanced batteries for electric vehicles (EVs), despite a decline in its second-quarter operating profit due to a temporary slowdown in global EV demand.

Earlier in the day, the company announced that sales during the April to June period of this year stood at 4.45 trillion won ($3.21 billion), down 23.8 percent from a year earlier. During the same period, its operating profit also shrank by 37.8 percent to 280.2 billion won.

The battery business slowdown affected the company’s overall profitability. The battery business’ sales fell 27 percent year-on-year to 3.87 trillion won, while its operating profit took a 46 percent drop during the same period to remain at 208 billion won.

The company attributed the decline to the headwinds of the EV adoption curve entering a chasm.

“Our battery business experienced a sharper-than-expected decline in demand, failing to meet market expectations,” the company said in its conference call.

“Despite challenging business conditions, we were able to maintain relatively solid performance through a profitability-focused strategy.”

The company said while the muted EV market demand will likely see a small upturn in the fourth quarter, the timing of overall market recovery is expected to come later than anticipated.

However, the battery maker upheld its forecast that the high growth of the EV industry will remain unaffected in the long term. It will continue its planned investments in increased capacity and advanced technologies.

Samsung SDI plans to invest 6.5 trillion won this year in facilities, up more than 50 percent from a year earlier, to expand facilities at its plants in Hungary and build plants for Starplus Energy, a joint venture between Samsung SDI and Stellantis in the United States.

The company also said that it is working on commercialization of all solid-state battery (ASB) as it expanded ASB’s sample supply to five customers this year.

“In the second quarter, we supplied (ASB) samples to new global premium automakers in addition to our existing customers and confirmed that our batteries achieved desired performances in tests,” the company said in the conference call.

“Overall, customers have are giving positive feedbacks on the performance of the ASB samples supplied.”

Samsung SDI CEO Choi Yoon-ho said, “the difficult situation may turn into a critical opportunity for the company” and “the company will secure distinguished competitiveness to capture new opportunities when the market turns around.”