David McNew, Getty Images
Industryweek 11484 071516samsungdavidmcnew

Samsung Could Enter Electric Car Market With BYD Stake

July 15, 2016
Talks are still in the early stages and details are just rumors at most, but Samsung has confirmed it wants to dive in to the market thanks to a deal with the Chinese automaker.

Samsung Electronics Co., the world’s largest maker of phones and memory chips, said it’s in talks with BYD Co. about investing in the Chinese electric-car manufacturer.

Details including the size of the investment will be disclosed when they’re confirmed, Samsung said Friday in an e-mailed statement. The investment in BYD, backed by Warren Buffett’s Berkshire Hathaway Inc., would bolster Samsung’s semiconductor business for cars, the South Korean company said.

BYD said Samsung has been actively pushing forward talks about buying its shares in a private placement. Talks are still underway, the Chinese company said, denying a report by the Korea Economic Daily that an agreement was reached to acquire a 4% stake.

Samsung is pursuing the investment after its affiliate was among foreign battery makers left off a list of suppliers approved by China, where sales of electric vehicles are surging and the government has sped up construction of charging points. The talks with BYD also add to the global trend of technology companies and automakers collaborating as car buyers increasingly demand more advanced powertrains and features that improve connectivity and safety.

“It puts Samsung into the electric-vehicle subsystem supply chain for a key Chinese electric vehicle and battery manufacturer,” said Bill Russo, a Shanghai-based managing director at Gao Feng Advisory Co. “BYD gets a technology innovation pipeline partner with a reputable brand.”

BYD, which rose 5.2% to HK$51.25 ($6.61) at the close in Hong Kong, has a market value of HK$161 billion ($20.76 billion). Samsung Electronics climbed 1.2% in Seoul trading.

China surpassed the U.S. as the largest market for electric vehicles last year. The government wants sales of what it calls new-energy vehicles to exceed 3 million units a year by 2025. Deliveries of new-energy vehicles more than doubled to about 170,000 units in the first half of the year, according to the China Association of Automobile Manufacturers.

BYD won approval from the Chinese government in February to raise as much as 15 billion yuan ($2.24 billion) through additional share sale to help fund expansion of its production of batteries for new-energy vehicles and product development. The company has six months to sell the shares after winning approval.

Popular Sponsored Recommendations

Legacy Phone Lines Are Draining Your Profits

Oct. 30, 2023
Copper wire phone line expenses that support emergency devices could be costing your company millions of dollars in wasteful overhead expenses. Rates have been skyrocketing while...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Electric Vehicles Spark New Opportunities in the Automotive Industry

Dec. 4, 2023
Automakers have increased plans to produce Electric Vehicles to meet customer demand for low emissions. With this radical shift, new opportunities and challenges for the auto ...

How to Build Zero-Cost On-Site Solar and Storage Projects

Nov. 25, 2023
The Inflation Reduction Act offers tax credits, incentives, and financing that enable no-cost projects. In Enel’s eBook, discover the critical role that incentives play in your...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!