hankyoreh

Samsung Electronics Vice Chairman Lee Jae-yong met with Hyundai Motor Company Executive Vice Chairman Chung Eui-sun on May 13 to discuss next-generation batteries for electric vehicles (EV). This was the first time that Lee and Chung, who control South Korea’s two largest chaebols (family-owned conglomerates), have held an official business meeting.

Sources in the industry think there’s a strong likelihood that the meeting will lead to cooperation between Samsung and Hyundai in the future automobile market. And with the government pushing the chaebol to make big investments in what it’s calling the Korean New Deal, others think that Lee is trying to underline his role, both inside and outside the company, in the wake of his public apology.

Sources at both companies told the Hankyoreh on Wednesday that Lee and Chung met at a Samsung SDI factory in Cheonan, South Chungcheong Province, on Wednesday morning. Following a tour of the facility, the two tycoons reportedly lunched together. Lee was accompanied by Samsung SDI President Jun Young-hyun and Samsung Advanced Institute of Technology President Hwang Sung-woo, while Chung brought along Hyundai Motor Company Presidents Albert Biermann, who is in charge of the R&D division, and Seo Bo-shin, who is in charge of its product line. This also represented the first time that Chung personally visited a Samsung facility.

During the conference on Wednesday, the two sides reportedly discussed the status of Samsung Electronics’ research initiative into developing solid-state battery technology, which is being jointly conducted by the Samsung Advanced Institute of Technology and Samsung R&D Institute Japan, and the possibility of cooperating on that technology.

The lithium-ion batteries that are currently being used not only have a short driving range of 400km but may also carry a fire risk, according to some reports. Solid-state batteries, which replace electrolytes with solid materials, are regarded as the next generation product that will replace lithium-ion batteries both in terms of safety and performance. The Samsung Advanced Institute of Technology recently published research suggesting that its solid-state batteries can power a car for a distance of as great as 800km on a single charge.

“Samsung’s solid-state batteries are structurally solid and stable. We hope that cooperation between our two firms will expand so that we can achieve innovation in the area of mobility,” said a Samsung source who attended the meeting on Wednesday.

Industry sources think it’s possible that Hyundai Motor will take on Samsung as a future partner in the field of batteries. While the two firms have cooperated on several technology issues related to the emerging market of futuristic automobiles such as connected cars and self-driving cars, batteries — a crucial component in EVs — have been an exception. So far, Hyundai has sourced the batteries for its EVs and hybrid cars from LG Chem; Kia’s source is SK Innovation. Meanwhile, Samsung SDI has supplied foreign automakers such as BMW, Volkswagen, and Audi. If Samsung and Hyundai forge a partnership in batteries, therefore, it could reset the board in the future automobile market.

But both firms have made it clear that they probably won’t be releasing a concrete cooperation plan in the near future. While Samsung SDI generally manufactures prismatic cells, Hyundai has hitherto used the pouch type of cell. If Hyundai sticks with the pouch design, therefore, cooperation between the two companies would require Samsung SDI to invest enough money to develop an entire new production line. Another variable is the expectation that lithium-ion batteries will maintain their dominance until at least 2025, given the speed of technological development.

“Solid-state batteries still represent an elementary level of technology, and they haven’t been commercialized yet. Furthermore, it wouldn’t be easy to convert from prismatic to pouch cells; that would cost hundreds of billions of won in additional funding,” said a source at Samsung.

“If, by some chance, we do end up using Samsung batteries, we’re talking about years in the future. If we wanted to use prismatic cells, we’d have to redo our designs from scratch. I don’t think cooperation would begin until 2028 at the earliest,” a Hyundai source said.

“The message of [Lee’s] recent public apology was that he’ll make up for Samsung’s past mistakes by faithfully carrying out his role as head of the group. That also appears to have been a big reason behind Lee holding this meeting: he wanted to show that he’s tracking down future business opportunities,” said Lee Chang-min, a professor of business administration at Hanyang University and deputy director of Solidarity for Economic Reform.

By Song Chae Kyung-hwa, staff reporter

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