Samsung’s $3.5 billion EV battery deal with GM hits pause

In August 2024, Samsung’s battery manufacturing division, Samsung SDI, and General Motors signed a $3.5 billion deal where the two companies would build a plant for manufacturing batteries for electric vehicles (EVs) in Indiana, USA. Unfortunately, the project may have been put on hold as the US carmaker may be rethinking its EV strategy due to lower-than-expected demand.

According to a new report from Korea JoongAng Daily, Indiana Economic Development Corporation’s spokesperson told the publication, “The project is being paused” regarding Samsung’s and GM’s $3.5 billion battery manufacturing deal. Reportedly, the decision has been taken as the demand for EVs is turning out to be softer than expected due to the US rolling back on EV incentives.

The publication says that there are multiple options on the table. First is the shift in the battery chemistry to lithium iron phosphate (LFP), which is what most EV makers prefer nowadays. Second is General Motors' withdrawal from the joint venture, just as it did last year with LG Energy Solutions.

When the deal was announced, the plant was expected to start mass production in the fall of 2027 and produce 36GWh of batteries annually, which would be enough for around 300,000 electric vehicles. Now that the project is being put on hold, that timeline will be delayed.