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Are Samsung, Hyundai at odds?

Latest deal between Hyundai affiliate and Samsung SDI’s rival rekindles questions on their relations

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Published : 2014-04-15 21:01
Updated : 2014-04-15 21:01

Hyundai Motor Group’s relations with LG Chem and SK Innovation seem to have reached a new high as Hyundai Motor is teaming up with LG Chem, and Hyundai affiliate Kia Motors with SK Innovation, for electric car battery supplies.

Hyundai’s luxury Grandeur Hybrid and Sonata Hybrid run on LG batteries, while Kia’s first electric vehicle Soul EV carries those of SK Innovation.

Korean auto giant Hyundai Motor was widely expected to clinch supply deals with LG Chem, also a global leader in its sector.

But the latest Kia partnership with SK Innovation, the country’s third-largest battery maker that does not rank among the global top five, leaves many questions about why the group is leaving Samsung SDI out in the cold.
Kia Motors CEO Lee Sam-ung (right) and SK Innovation CEO Koo Ja-young participate in an event to celebrate the release of Kia’s first electric vehicle, the Soul EV, in Seoul on Tuesday. (Yonhap)

LG Chem ranked as the world’s top electric vehicle battery maker in 2013, while Samsung SDI came in fourth, according to B3, an international research institute.

Some analysts pointed out that, as a latecomer, Samsung lost its edge in the Korean auto parts sector.

“LG Chem was making efforts before SDI to foray into the electric vehicle battery market,” said an analyst declining to be named.

“There is no gap in terms of their technological advancement, though.”

LG Chem’s market power has allowed it to garner trust within the auto industry.

“LG Chem seems to have built trust among car manufacturers since electric cars equipped with LG Chem’s batteries hit the road since 2009, whereas Samsung’s batteries have just started to be mounted on the i3,” said an industry official.

“Building trust among partners and also customers in the car industry is important.”

SK Innovation also attributed the recent supply deal with Kia to a strong partnership based on trust.

“Even though it is hard to say SK’s technology is better than that of Samsung, the latest deal was achieved based on strong rapport between the two companies as we have collaborated since 2010 for the development of electric car models called BlueOn and Ray,” an SK Innovation official said.

Samsung, meanwhile, is constantly attempting to beef up its car component business by seeking opportunities overseas.

Samsung Electronics has worked together with BMW to develop a car management application that links a smart watch to the car company’s i3.

Samsung SDI is also supplying its batteries to electric cars including BMW’s compact car and is reportedly trying to have its batteries installed in Tesla’s electric cars.

By Kim Young-won (wone0102@heraldcorp.com)

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