Samsung SDI has embarked on a large-scale capital increase to reorganize its business, but it is expected to have difficulty shaking off performance uncertainties for the time being. The Hungarian factory, its main overseas production base, is affected by the slowdown in demand in the European market, and the subsidies it can receive in the U.S. are also less than those of its competitors.
According to SNE Research, a market research firm specializing in energy, the sales volume of Samsung SDI's batteries in the global electric vehicle market decreased by 8.8% in the first five months of this year compared to the same period last year. Among the three major battery companies in Korea, it is the only one to experience negative growth, while sales of LG Energy Solution increased by 11.5% and SK On by 18.1% during the same period.
The market share of the three major battery companies in Korea is on a declining trend, with Samsung SDI falling behind the most. In the first five months of this year, LG Energy Solution's market share decreased by 2.1 percentage points to 10%, ranking third, while SK On fell 0.7 percentage points to 4.2%, ranking fifth. Samsung SDI ranked seventh, with its market share shrinking from 4.9% to 3.3%.
Recently, Samsung SDI injected 1.6 trillion won through a capital increase, but concerns are being raised that a turnaround may not be expected anytime soon. The company plans to use the funds raised this time for its major production facilities in the U.S. and Europe, but the local market situation is challenging.
Since last year, the shipment volumes of major customers, including BMW, Audi, and Rivian, have fallen short of expectations, leading to a declining trend in the utilization rate of the Hungarian factory. Additionally, Chinese companies such as CATL and EVE Energy are speeding up their investments in Hungary, making local business operations even more challenging.
The U.S. market, which Samsung SDI entered later than its competitors, continues to face uncertainty due to tariff policies. Samsung SDI operates or prepares joint factories with Stellantis and GM without a standalone factory in the U.S., which results in its benefits from the Advanced Manufacturing Production Credit (AMPC) being smaller than those of LG Energy Solution and SK On.
The fact that Stellantis, a key client and partner in the U.S., is being impacted by tariffs is also a concern. Soon after the Donald Trump administration imposed a 25% tariff on imported cars, Stellantis halted production at its plants in Mexico and Canada, and the utilization rate of the joint venture's first factory, which began mass production at the end of last year, has not reached expectations.
There are predictions within Samsung SDI and outside that a large-scale deficit is unavoidable in the second quarter of this year. In the fourth quarter of last year, Samsung SDI recorded a quarterly loss for the first time in over seven years, totaling 256.7 billion won, and in the first quarter of this year, it incurred an operating loss of 434.1 billion won. The annual operating profit for last year was 363.3 billion won, a 76.5% decrease compared to 2023, with the battery sector experiencing a deficit of 268.3 billion won.