Samsung Needs Electric Vehicles... Breakthrough Through Lee Jae-yong's Network

[Asia Economy Reporter Park Sun-mi] As electric vehicles become a new customer base in the electronics, semiconductor, and battery industries, Lee Jae-yong's global network is shining as a breakthrough for Samsung Electronics, which does not operate an automobile business.

On the 20th, the business community evaluated that Samsung SDI's full-scale entry into the U.S. and European electric vehicle markets was the result of Chairman Lee closely monitoring the rapidly growing electric vehicle market and seeking cooperation plans with major automakers. In particular, Chairman Lee's recent moves have been focused on autonomous driving and electric vehicle-related parts businesses that can create synergy with Samsung Electronics' various business divisions.

A business insider explained, "Samsung SDI's establishment of a battery cell and module joint venture with Stellantis, the world's fourth-largest multinational automobile company, in the U.S. to actively enter the North American electric vehicle market is known to have been greatly influenced by the friendship between Chairman Lee and John Elkann, Chairman of Stellantis and Exor." He added, "At John Elkann's suggestion, Chairman Lee served as an outside director of Exor, the largest shareholder of Stellantis, from 2012 to 2017, building a strong global network with automaker executives."

Chairman Lee's achievement in having Samsung SDI's 'P5' battery installed in BMW's latest flagship electric vehicle, the 'New i7,' is also attributed to his close network with Oliver Zipse, Chairman of BMW Group. The P5 battery is a product that consolidates Samsung SDI's cutting-edge material technology to maximize electric vehicle driving range. Compared to existing electric vehicle batteries, it features a 20% higher energy density and reduces material costs by more than 20%.

Since starting a joint electric vehicle development project with BMW in 2009, Samsung has maintained close cooperation centered on electric vehicle batteries for 13 years. From the early stages of cooperation, Samsung directly engaged with BMW executives to build trust. As a result, Samsung SDI's high-performance batteries have been installed in BMW's eco-friendly electric vehicles, starting with the BMW i3, the company's first pure electric vehicle launched in 2013, followed by the i8 (2015), iX, and i4 (2021). In 2014, cooperation expanded beyond simple battery supply to joint development of next-generation materials and electric vehicle technologies. Samsung SDI signed a long-term supply agreement worth approximately 4 trillion won with BMW in 2019 for automotive batteries, and the two companies are currently expanding the supply scale more than threefold due to market growth and strong BMW vehicle sales.

Automobiles remain a painful subject for Samsung, which has experience in divestment. Under the leadership of the late Lee Kun-hee, who was determined to enter the automobile industry, Samsung established Samsung Motors in Busan in 1995 and achieved the launch of the SM5 in 1998. However, after the Asian financial crisis, Samsung had to exit the automobile business by selling Samsung Motors to the French Renault Group in 2000. Nevertheless, Chairman Lee did not sever ties with the automobile industry after the sale; he personally managed meetings with GM CEO Daniel Akerson in 2011, Toyota President Akio Toyoda in 2012, and Volkswagen Chairman Martin Winterkorn, and acquired automotive electronics company Harman in November 2016.

In 2018, Samsung selected "semiconductor-centered automotive components" as a future new growth business. A business insider said, "As the automobile market shifts from internal combustion engines to electric vehicles, automobiles have become an essential part for Samsung, which operates in electronics, semiconductors, and batteries. Chairman Lee's network plays a significant role in securing joint venture partners." However, some voices suggest that to expand its presence in the rapidly growing automotive electronics and electric vehicle battery markets, Samsung needs to fundamentally expand its business areas through mergers and acquisitions (M&A).

This content was produced with the assistance of AI translation services.