Samsung expanding EV battery plant in Hungary as EU probes state subsidy

Europe’s electric vehicle (EV) revolution is continuing apace as Asian battery manufacturers build up EV power pack capacity in recently launched or extended plants in the region. 

South Korean giant Samsung is now investing 1.16 billion euros in a project to expand the lithium-ion battery production plant it launched in May 2017 at the town of Göd in northern Hungary. 

Last year, the facility increased output to reach its current annual capacity, manufacturing enough batteries to power 50,000 electric vehicles.

The latest project of the Seoul, S.Korea-based group’s batteries offshoot, Samsung SDI was formally announced in October by Hungary’s Minister of Foreign Affairs and Trade Péter Szijjártó. At a joint news conference, he confirmed the company expects to create a further 1,200 jobs at the 330,000 meters-square site in Göd.

Samsung SDI Hungary director Woo-Chan Kim expressed his hope that the plant will become one of the largest in the world and stressed that the company is committed to further (local) expansion.   

However, the latest Samsung scheme has been got caught up in an EU investigation into whether Hungary’s 108 million euros in state subsidy towards the plant expansion breaches EU rules on regional state aid.

The European Commission, which launched the “in-depth” probe last month, indicated that it has initial doubts that the award of grant aid meets all the criteria set by EU guidelines.

More specifically, the Commission said it doubted in this case that the subsidy had a genuine “incentive effect” on the project and believed Samsung could have proceeded with the expansion anyway, without public funds.

The Commission also admitted in a statement that it could not rule out the possibility that the state subsidy may “lead to the relocation of jobs from other (EU) member states to Hungary."

EU Commissioner Margarethe Vestager, responsible for competition policy, said the inquiry will investigate whether the government grant was really necessary for Samsung SDI to invest more in Göd. Also, it will check the sum being paid is kept to the minimum and that the payment does not “distort competition."

“Public investment is important to foster economic growth in disadvantaged regions in Europe. But, public support should only be given it’s necessary to trigger private investment in the disadvantaged region concerned.

“Otherwise, it only gives the beneficiary an unfair advantage over its competitors at the expense of taxpayers,” the commissioner added in a statement.

Last month, Hungary’s Minister of Foreign Affairs and Trade Szijjártó confirmed the government is offering the Samsung scheme a grant “relevant to its size and importance." But, he admitted, details could not be disclosed until it had EU approval. 

Samsung SDI already manufactures automotive batteries at plants in Ulsan, South Korea and Xian in China. The Hungarian operation is the company’s only such plant in Europe to date.

source : https://www.plasticsnews.com/news/samsung-expanding-ev-battery-plant-hungary-eu-probes-state-subsidy