Now that the announcement is out that a $2.5-billion electric vehicle battery plant is coming to Kokomo, it begs the question: what does it mean for Stellantis and the future of its EV technology?
Stellantis and Samsung SDI said their joint-venture facility will produce lithium-ion batteries for a range of electric vehicles produced at Stellantis’ North American assembly plants.
But Jesse Toprak, a long-time auto-industry analyst and consultant, said it’s almost certain the new plant will be developed to be as flexible as possible to adapt to rapidly evolving battery technology.
That’s especially important for the new facility, considering the plant won’t be operational for three years, and battery technology is really still in its infancy, he said.
“Right now, they’re working on batteries they can actually put on the vehicles next year,” Toprak said. “What about the batteries that are going to go on the vehicles in five years? They’ve got to work on that today to be ready for the marketplace when five years comes knocking.”
The factory is a huge win for the city and state. The project will bring 1,400 new jobs to the region and marks the largest single investment by a company in the county’s history.
But in the world of EV technology, the new plant is late to the game, Toprak said.
General Motors and Ford have already launched fully electric vehicles, and are releasing more this year. Tesla sold nearly a million electric vehicles in 2021 Stellantis has yet to release any full EVs in the U.S. However, it has 18 EV models from its various brands in Europe.
“So far, Stellantis has lagged behind other legacy automakers in the U.S.,” Toprak said. “There’s no doubt.”
He said that’s not necessarily a bad thing, though. With EV battery technology already changing, the company can be more strategic on developing their EV fleet. The Kokomo plant will play an integral part of that strategy.
“They’re going to be a relative latecomer to the EV game,” Toprak said. “But from their perspective, it’s a kind of save-the- best-for-last approach where they can strategically find out where to spend the money and look at this as a much more long-term plan, rather than be the first in the market place.”
He said the question now is whether Stellantis can gain back what it’s losing out on in the EV market. A major component of that will be whether they can offer an affordable EV that appeals to the masses.
Right now, most EVs are comparatively expensive due mostly to the cost of producing batteries, which is still an unprofitable business. Toprak said half the cost of making EVs right now is in the battery.
“In order to promote mass adoption that appeals to everybody, not just the early adapters or consumers who want to portray an environmentally friendly image, you have to have EVs that are comparable in price to their counterparts for the average Joe.”
Toprak said the only way to do that is through strategic partnerships such as the one between Stellantis and Samsung SDI, which has decades of experience in researching and developing battery technology.
“Right now, the most prudent way of trying to bring EVs to a large scale is to work with a legacy company that has deep experience in battery technology and R& D, like Samsung,” he said. “This is the right way to do it.”
Yoonho Choi, president and CEO of Samsung SDI, said Tuesday at the announcement in Kokomo that the new plant will secure “a solid foothold in a rapidly growing North American EV market through the joint venture with Stellantis.”
“We will make sincere efforts to bring satisfaction to the market with top-class quality products in the future, and we will contribute toward meeting the climate change target,” he said.
Toprak said that with major advancements in battery tech already in the pipeline, he expects the Kokomo facility will be used for two purposes: producing batteries for its current EV fleet, and developing and experimenting with the newest battery technology for its future vehicles.
“I’m certain that’s how they’re going to build this plant,” he said. “There’s almost no doubt. It’s not like there’s unlimited amounts of lithium and nickel in the world. At some point, they’re going to have to pivot. So if you’re building a brand new plant, it would be a big mistake not to make it a flexible production facility.”
And for Stellantis, the clock is ticking. The company aims to have global annual battery electric vehicles sales of 5 million by 2030. In the U.S., the plan calls for 50% of sales to be made up of battery electric passenger cars and light-duty trucks.
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