South Korean battery manufacturer Samsung SDI has secured its first supply agreement with German luxury carmaker Mercedes-Benz Group AG, marking a significant expansion into Europe’s premium electric vehicle market.
The companies announced on Monday that they have signed a multi-year contract covering electric vehicle batteries for upcoming compact and mid-sized models. The agreement also includes cooperation on next-generation battery technology, aimed at improving performance and extending driving range.
Samsung SDI, a subsidiary of the broader Samsung Group that focuses on battery production and advanced materials, will supply high-performance cells using nickel-cobalt-manganese (NCM) chemistry. These batteries are designed to deliver longer driving ranges and improved durability, key factors as automakers compete in the fast-growing electric vehicle segment.
Mercedes-Benz said the batteries will be used in future compact electric SUVs and coupe models as part of its broader strategy to expand its electric lineup and strengthen its position in the premium EV market. The partnership also reflects growing efforts across Europe to make electric vehicles more affordable while maintaining performance standards.
The deal extends Samsung SDI’s presence in the European automotive industry, where it already supplies batteries to several major manufacturers, including BMW, as well as companies linked to Stellantis joint ventures, Volvo Group, and Jaguar Land Rover.
Beyond supply arrangements, both companies confirmed plans to collaborate on research and development, focusing on next-generation battery systems that could shape future electric mobility technologies.
The agreement was signed during a visit by Mercedes-Benz senior executives to South Korea, where discussions were also held with other local technology partners. According to industry reports, the contract could involve battery supply volumes measured in tens of gigawatt-hours, with an estimated value exceeding €5.8 billion, although official figures were not disclosed.
During the visit, Mercedes-Benz CTO Jörg Burzer highlighted the importance of Korean partnerships in advancing automotive innovation, stating that cooperation in electrification and digital technologies is central to the company’s future mobility strategy.
Market reaction reflected the significance of the deal. Samsung SDI’s shares rose nearly 5 percent in Seoul trading on Monday, while Mercedes-Benz shares declined by more than 2 percent in European markets.
The partnership comes as the European Union continues to push for wider EV adoption while addressing affordability concerns among consumers. Automakers are increasingly turning to long-term battery supply agreements to secure stable access to critical components amid rising global competition for battery materials.
With this agreement, Samsung SDI strengthens its position in the global EV supply chain, while Mercedes-Benz moves closer to scaling up its next generation of electric vehicles for international markets.
