Samsung SDI has signed a multi-year agreement to supply electric vehicle (EV) batteries to Mercedes-Benz, marking its first confirmed entry into the German luxury carmaker's EV lineup and concluding months of advanced negotiations over one of the industry's most closely watched battery deals.
The agreement, according to Seoul Economic Daily, was announced Thursday in Seoul, following reports last week that the two companies were in the final stages of talks over supplying prismatic batteries for Mercedes-Benz vehicles scheduled for the 2028 model year. According to industry officials cited by The Elec, the structure of production — including where the batteries would be made — was among the last remaining issues under discussion.
Under one scenario previously considered, production lines — or potentially an entire facility — could be dedicated in Europe exclusively to Mercedes-Benz. Possible locations discussed included Austria, Slovakia, and the Czech Republic, reflecting the carmaker's broader effort to localize supply chains and stabilize long-term battery sourcing. The model would mirror arrangements used by other automakers, including LG Energy Solution, which has built dedicated production lines in the US for Toyota.
The contract is expected to involve large volumes of prismatic cells over a long-term horizon, consistent with typical automotive battery supply agreements that often span seven to ten years or more. Industry estimates cited in Korea suggest the deal could be worth more than KRW10 trillion (approx. US$6.8 billion), based on expected pricing and multi-gigawatt-hour annual demand.
At Thursday's signing ceremony at the Andaz Seoul Gangnam hotel, senior executives from both companies attended, including Samsung SDI chief executive Choi Joo-sun and executive vice president Cho Han-je, alongside Mercedes-Benz chairman Ola Källenius, chief technology officer Jörg Burzer, and Mercedes-Benz Korea chief executive Mathias Vaitl.
The batteries will use high-nickel NCM chemistry, designed to improve energy density, driving range, and durability, while incorporating Samsung SDI's proprietary safety systems. They are expected to power future compact and mid-size electric SUVs and coupe models built on Mercedes-Benz's upcoming Mercedes Modular Architecture (MMA) platform, including entry-level electric models expected around 2028.
Samsung SDI is one of a small number of battery makers capable of mass-producing prismatic cells in Europe, a format favored by some automakers for its packaging efficiency and structural durability. Its rival CATL also produces prismatic cells at its German facility, though much of that output is currently allocated to Volkswagen.
Securing Mercedes-Benz — alongside existing relationships with BMW and Volkswagen — would significantly deepen Samsung SDI's position within the supply chains of Germany's top luxury automakers, and further entrench its role in Europe's next-generation electric vehicle ecosystem.
Article edited by Jack Wu
