[Exclusive] Sangshin IDP Receiving Northvolt Love Call... Supply Cooperation Accelerates Rapidly

Northvolt Hopes for Korean Components in Electric Vehicle Batteries
Can Manufacturer Sangsin EDP Shows Interest, Equipment Suppliers Also Being Considered
Financial Sector Expects Benefits for Korea's Secondary Battery Industry Overall

[Asia Economy Reporter Lee Seon-ae] It appears that the cans (CAN, containers that safely hold the contents of secondary batteries) produced by Sangsin EDP will be used in secondary batteries manufactured by Swedish battery maker Northvolt.

According to industry sources on the 30th, Northvolt is currently in supply contract negotiations with Sangsin EDP. Northvolt is the only secondary battery manufacturer in Europe and is aggressively investing and expanding production with full support from the European Union (EU). Its main products are prismatic and cylindrical batteries, specifically can case-type lithium-ion secondary batteries.

Initially, Northvolt intended to source battery cans from a Chinese company but was dissatisfied with the quality and is now pushing to switch to Korean-made components. The domestic can parts supplier that Northvolt is closely watching is Sangsin EDP.

Sangsin EDP is a secondary battery parts manufacturer. Established on January 28, 1992, it was listed on the KOSDAQ market on May 23, 2007. Since 2002, it succeeded in domestic production of prismatic and cylindrical cans and ASS'Y (case caps) for mobile use, which were previously fully imported from Japan, and has developed medium and large cans (for automobiles and ESS (Energy Storage Systems)) for mass production for electric vehicles. Its major client is Samsung SDI. Sangsin EDP holds over 90% of Samsung SDI’s secondary battery can market share.

An industry insider familiar with the matter said, "Northvolt is actively negotiating with Korean secondary battery parts companies on all fronts. However, regarding can products, other companies are struggling to supply existing customers, so realistically, the only feasible supplier is Sangsin EDP."

Northvolt is also scouting domestic equipment companies. It is essentially seeking partners across Korea’s materials, parts, and equipment sectors. Considering Northvolt’s investment and expansion pace, it is expected that domestic secondary battery equipment orders will be placed collectively early next year.

The securities industry expects that Northvolt’s comprehensive negotiations with domestic companies will invigorate Korea’s secondary battery industry. A securities industry official said, "Northvolt’s investment progress is relatively fast, and continuous investments are planned. As domestic companies are selected as primary partners, the entire Korean secondary battery industry will benefit."

Meanwhile, Northvolt is rapidly growing as the only secondary battery manufacturer in Europe. Recently, it raised $2.75 billion (about 3 trillion KRW) from a fund invested by Volkswagen and Goldman Sachs, and plans to use this along with a total of $6.5 billion (about 7 trillion KRW) to expand its factory under construction in Skellefte?, Sweden. This will increase production capacity from the initial target of 40 GWh (gigawatt-hours) to 60 GWh, enough for about 1 million electric vehicles. Batteries produced at this plant will be supplied to ESS starting at the end of this year and to automobiles from 2023.

Northvolt plans to build at least two more factories in Europe over the next decade. Currently, through its joint venture with Volkswagen, Northvolt Zwei, it is constructing a factory in Salzgitter, Germany, aiming for mass production by the end of 2025. Northvolt aims to secure an annual production capacity of 150 GWh by 2030, capturing 25% of the European battery market, and is expanding supply contracts with leading automakers. Recently, it signed supply contracts worth $14 billion (about 15.82 trillion KRW) with Volkswagen and BMW. The order backlog secured from major automakers has exceeded $27 billion (about 30.51 trillion KRW).