Key Points:
- Lotte Energy was selected as the exclusive copper foil supplier for Samsung SDI-Stellantis JV’s first U.S. battery plant.
- The plant’s opening has been moved to late 2024 to qualify for IRA subsidies.
- Depending on the plant’s utilization rate, Lotte Energy’s earnings could recover significantly due to this deal.
- Lotte Energy is also seeking to build a copper foil plant in Delaware to capitalize on IRA subsidies further.
South Korea’s third-largest battery maker, Samsung SDI Co., has selected Lotte Energy Materials Corp. as the exclusive supplier of copper foil for its first U.S. battery plant, currently under construction in partnership with Stellantis N.V., a Netherlands-based automaker. The joint venture, StarPlus Energy (SPE), chose Lotte Energy’s copper foil after it passed rigorous quality tests, typically taking about a year.
Lotte Energy, previously known as Iljin Materials Co., is one of South Korea’s leading producers of copper foil, a crucial material used in lithium-ion batteries. Copper foil, or elecfoil, is a thin material surrounding the anode, a lithium-ion battery’s negative end. High-strength copper foils are essential for producing safer, high-density rechargeable batteries.
The Samsung SDI-Stellantis JV is accelerating the opening of its U.S. battery plant, which has an annual capacity of 33 gigawatt hours (GWh), enough to power 500,000 electric vehicles (EVs) annually. Originally slated to open in early 2025, the plant is expected to begin operations later this year to qualify for subsidies under the U.S. Inflation Reduction Act (IRA), which supports EVs and batteries manufactured in North America. The plant is currently in the testing phase.
Lotte Energy is poised to benefit significantly from this exclusive supply deal, as the demand for copper foil is expected to drive a recovery in its earnings later this year. The company’s financial performance had been impacted by a slowdown in the EV market, which affected key customers like BMW, Volkswagen, and Audi. However, with the potential for high utilization rates at the new U.S. battery plant, Lotte Energy could see a substantial increase in sales.
Industry estimates suggest that if the plant operates at full capacity, it could require 16,500 to 19,800 tons of copper foil annually. Depending on the plant’s utilization rate, Lotte Energy could generate between 100 to 300 billion won ($754.4 million) in annual sales from this supply deal.
