Stellantis Moves to Exit Samsung Battery Partnership as EV Sector Faces Headwinds
Stellantis NV, the global automotive giant behind iconic brands like Jeep and Ram, is actively seeking to withdraw from its United States battery manufacturing joint venture with South Korea's Samsung SDI Co. This strategic shift comes as the automaker grapples with mounting losses in the electric vehicle segment and implements measures to preserve capital following recent financial setbacks.
Financial Pressures Drive Strategic Reevaluation
The decision to potentially exit the battery partnership follows Stellantis' announcement of more than €22 billion (approximately US$26 billion) in writedowns last week, highlighting the significant financial challenges facing traditional automakers in the evolving electric vehicle landscape. According to sources familiar with internal discussions who requested anonymity due to the sensitive nature of the matter, Stellantis has been exploring various options to divest from the venture, though no final decision has been reached and circumstances could still change.
An exit from the joint venture could prove costly for Stellantis and involve a lengthy process, according to some individuals with knowledge of the situation. Potential pathways include selling Stellantis' stake to a third party, though the company has not confirmed specific plans.
Broader Industry Reassessment of EV Investments
This development represents part of a broader industry trend where automakers including Stellantis, General Motors Co., and Ford Motor Co. are reassessing billions of dollars in battery investments made during the Biden administration. The reassessment comes as electric vehicle demand has failed to materialize as quickly as anticipated, compounded by policy shifts under President Donald Trump that have undermined support for plug-in vehicles.
Stellantis CEO Antonio Filosa is leading efforts to stem losses on electric vehicle and battery projects that were projected to be financially challenging. The company recently exited a separate joint venture with LG Energy Solution Ltd. in Windsor, Canada, where LG purchased Stellantis' stake for just US$100, though the automaker plans to continue purchasing EV batteries from that facility.
Samsung's U.S. Battery Operations and Market Adaptation
The Indiana joint venture between Stellantis and Samsung, established in 2021 with a pledged investment of US$2.5 billion and the creation of 1,400 jobs in Kokomo, represents Samsung's only U.S. battery manufacturing facility. The plant began production in 2024 but has already shifted some manufacturing capacity toward producing cells for energy storage applications rather than exclusively for electric vehicles.
This adaptation reflects broader industry efforts to pivot production from EV batteries to cells for grid and data center applications, which are experiencing increased demand. Samsung has reportedly secured several new customers for stationary storage cells, indicating successful diversification within the energy storage market.
European Battery Ventures Also Face Challenges
The strategic reassessment extends beyond North America. In Europe, the Stellantis-backed electric vehicle battery joint venture Automotive Cells Co. recently confirmed it will halt plans to build battery factories in Germany and Italy. The company is also engaged in discussions with unions at its French venture regarding potential temporary unemployment measures due to difficulties in ramping up battery manufacturing operations.
Analysts have expressed concern about the implications of Stellantis' strategic shifts. HSBC analyst Michael Tyndall noted in a February 6 client communication that "the exit from the LG joint venture in Canada was a surprise and leaves us wondering what the future is for the Indiana joint venture with Samsung SDI."
As the automotive industry navigates this transitional period, Stellantis' potential exit from the Samsung battery partnership underscores the complex challenges facing traditional manufacturers as they balance ambitious electrification goals with financial realities and evolving market conditions.
