Internet

Searching for clues on whether Samsung is still considering Normal for a new EV battery plant


It’s been five months since Sen. Dick Durbin spilled the beans that Samsung SDI was considering building a new battery plant in Normal, right next to Rivian, with thousands of new jobs.

And five months later … it’s been crickets.

But Bloomington-Normal officials and others interviewed by WGLT say that silence doesn’t mean it’s not happening. And even if Samsung doesn’t pair up with Rivian for a Normal battery site, that doesn’t mean Rivian may not find another dance partner – or another path – to local production.

Sometimes economic development deals take six months, and sometimes they take years, said Patrick Hoban, CEO of the Bloomington-Normal Economic Development Council. Bloomington-Normal has not been told it’s out of the running, Hoban said, after presenting a still-undisclosed package of local and state incentives to Samsung.

“We’re in constant communication with the State of Illinois. And then I bug the site selectors just enough not to annoy them. Same thing you’re doing: ‘Hey, is there any update?’” Hoban told WGLT. “They said they were happy with the incentives that were put together and were very impressed with our community. But we’re just playing the waiting game right now.”

Normal Mayor Chris Koos said he too hasn’t heard anything in recent months.

“My sense is, once we know, we’ll announce it publicly one way or the other,” he said.

And from the Illinois Department of Commerce and Economic Opportunity (DCEO): “As a matter of policy, DCEO does not discuss specific business prospects. However, we can confirm that as a state we continue to prioritize attracting electric vehicle manufacturing partners to Illinois,” a spokesperson said.

WGLT has also reached out to Samsung SDI for comment.

Finding a dance partner

Part of the delay may because there are so many moving parts in the rapidly changing electric vehicle business. Ensuring a reliable supply of batteries is a top priority.

There are at least 13 EV battery plants announced across the U.S., according to the U.S. Department of Energy. Of the 13 plants that are planned, eight are joint ventures between automakers and battery manufacturers. There are likely others yet to be announced.

Samsung SDI is supplying the battery cells for Rivian’s launch vehicles, which are being made in Normal. (It also supplies other EV makers.) Samsung has been looking for a site for its first U.S. battery cell plant since at least mid-2021. So it wasn’t too surprising when Durbin disclosed in August that Normal was a finalist for a Samsung plant. At that time, Samsung had reportedly not decided whether to launch the U.S. plant as a joint venture with an automaker or as an independent manufacturing site.

Then, in October, Samsung announced a joint venture (making batteries) with a different company, Stellantis, the company that makes Jeep, Dodge, Chrysler, and Ram vehicles. (That battery plant’s location is still unknown.) A month later, Samsung announced plans to build a $17 billion semiconductor factory in Texas to increase its manufacturing capacity and alleviate the global chip shortage. But that’s not a battery plant.

Does any of that mean Samsung is no longer interested in Normal? We don’t know. But as recently as last month, Samsung SDI’s new CEO said the company aspired to be the No. 1 player in the EV battery market globally. (It’s currently No. 6.)

And Bloomington-Normal is far from the only community partaking in EV speculation. Just this week, the Kansas City Star reported state lawmakers there are fast-tracking legislation to create the state’s largest business incentive program ever, possibly for a $4 billion mystery plant. Experts say the scope of the project points to an EV, battery or microchip plant.

Rivian’s 3 paths to more batteries

There are also plenty of moving parts within Rivian itself.

Rivian announced in mid-December it would be building a $5 billion, second manufacturing plant in Georgia. It will have more employees and capacity than its first facility in Normal.

At that time, Rivian said the plant would eventually have “co-located cell production,” meaning on-site battery cell production in partnership with another company. The Atlanta Journal-Constitution reported that could involve a joint venture with Samsung. One wrinkle there is that one of Samsung’s competitors, SK, is already building a $2.6 billion battery plant about 50 miles away from Rivian’s new Georgia site.

But just because Rivian is doing “co-located cell production” in Georgia, that doesn’t mean it won’t do the same in Normal. After all, the company just pulled in $13.7 billion in gross proceeds from its massive initial public offering in November.

Rivian founder and CEO RJ Scaringe laid out his company’s broader battery strategy in a mid-December earnings call. Rivian is pursuing three “parallel approaches” to batteries that are not mutually exclusive, Scaringe said. They are:

1) Buying existing cells from a supplier, from existing capacity. That’s what Rivian did with Samsung SDI to get its cells for its launch vehicles (now in production). “We don’t see a lot more deals like that across the industry. As demand for cells starts to climb, we need to be building new capacity,” Scaringe said.

2) Creating “co-investing capacity with cell suppliers.” That would mean Rivian and a battery maker share the cost of building new battery-manufacturing capacity, possibly nearby to a Rivian vehicle plant. Rivian will be pursuing this, Scaringe said, but it hasn’t “announced those relationships yet.”

3) Leaning even more into vertical integration, Rivian will make the cells itself – controlling its design and even sourcing of the raw materials that go inside. Rivian plans to pilot this work starting in late 2022, Scaringe said. “Vertical integration doesn’t mean the first two categories (see above) don’t remain super-important. It’s simply in response to our intended growth,” he said. Bloomberg reported in November that Michigan, Texas, and Arizona were under consideration for a standalone battery factory.

More details could come in March at Rivian’s next quarterly financial update. The company does not typically reveal much new information outside of those updates.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.