Samsung and Bosch to jointly produce electric car batteries by 2011

A joint venture of South Korean rechargeable battery maker Samsung SDI and German industrial giant Bosch plans to start commercial production of lithium-ion batteries for electric vehicles by 2011 with a view to securing almost a third of the global market.

Construction of the plant for the joint venture, named SB LiMotive, commenced last week in the South Korean city of Ulsan, according to Samsung SDI, a subsidiary of the Samsung conglomerate.

SDI and Bosch will invest a total of US$409.2m over the next seven years on the facility, with the stated aim of capturing a 30 per cent share of the global market for green autos by 2015.

Under an agreement signed last month, SB LiMotive will exclusively supply lithium-ion batteries for BMW's electric cars from 2013 to 2020. The German automaker recently announced plans to launch a line of all-electric cars under a newly created sub-brand, Megacity.

The company said that it also hopes to gain contracts with other car manufacturers and, with additional investments by its founding partners, eventually produce batteries for portable electronic products and large-scale battery storage systems.

Samsung SDI chief executive Kim Soon-taek told The Korea Times newspaper last week that the investment was part of the company's wider strategy "to strengthen its energy-related product portfolio".

SB LiMotive was established last year to develop, manufacture and sell lithium-ion batteries. By locating its production base in South Korea, the company may be eligible for tax breaks and other incentives under the government's high-profile $85bn green stimulus package aimed at fostering domestic eco-friendly industries.

SB LiMotive will likely compete in the market with another South Korea-based joint venture for lithium-ion car batteries.

Hyundai Mobis, the auto parts manufacturing unit of Hyundai Motor, and the country's largest chemical company LG Chem last month signed a memorandum of understanding to develop and produce lithium-ion battery packs for hybrid cars.

Financial details of the agreement were not disclosed. However, LG Chem in June said it planned to invest US $817m in an electric car battery plant over the next four years.