Big Idea:

South Korea’s leading battery materials producer, EcoPro BM, has signed a $44 trillion won ($34 billion) contract with Samsung SDI to supply lithium nickel-cobalt-aluminum oxide (NCA) cathodes for electric vehicle (EV) batteries over a five-year period from 2024 to 2028. EcoPro BM's stock rose by 2.2% following the announcement.

Why It Matters:

With EV battery demand expected to surge by 30% by 2030,  the long-term nature of this cathode supply contract reflects both companies' confidence in the sustained growth of the EV market.

Zoom In:

Samsung SDI, although controlling the smallest market share among South Korea's top three battery providers (including LG Energy Solution Ltd. and SK On Co.), supplies EV batteries to major carmakers such as BMW, General Motors, and Hyundai Motor Co. 

Zoom Out:

EcoPro BM and Samsung SDI have a history of collaboration, with EcoPro BM supplying cathodes to Samsung SDI since 2011. In 2020, they established a joint venture, EcoPro EM Co., to supply NCA cathodes to Samsung SDI's offshore battery plants. This long-standing partnership is viewed as a foundation for EcoPro group's future growth.

Key Details:

• The first batch will be produced at EcoPro BM’s plant in Pohang, South Korea, with production expanding to a new facility in Hungary from 2025.
• The facility's expected annual output is 108,000 tons, enough for about 1.35 million EVs.
• NCA cathodes are known for their high energy density and efficiency but require careful cycling to minimize efficiency loss due to microcracking.

“EcoPro and Samsung SDI’s trust-based partnership is playing a crucial role in strengthening Korea’s battery industry,” said EcoPro BM CEO Joo Jae-hwan in a statement. “This long-term supply deal provides another opportunity to consolidate our relations.”