Samsung SDI has struck a multibillion-dollar deal with BMW to supply it with electric vehicle batteries.
The two companies singed a memorandum of understanding at BMW's newly-opened driving center on Yeongjong Island in Incheon on Monday. It also encompasses a joint development contract for new EV batteries.
BMW plans to use Samsung SDI's EV batteries in its present line-up of eco-friendly cars and also in upcoming hybrid vehicles.
The companies declined to say exactly how much money the contract is worth, but the amount is estimated to be billions of U.S. dollars.
Samsung supplies EV batteries to the BMW i3, which was unveiled in the U.S. and Europe last year, as well as electric sports car i8, set for release this fall.
Samsung has seen its EV battery sales surge as the German cars sell well.
BMW sold 5,396 i3 EVs in the first half of this year, with U.S. monthly sales exceeding 1,000 units in May.
Sales of the vehicle are expected to rise even further due to its scheduled release in Korea and other countries in the second half of this year. If they surpass 30,000 this year, Samsung stands to earn more than W200 billion from battery sales to BMW alone, more than twice the total sales of W100 billion it made last year.
The Korean company is teaming up with global automobile makers to expand its share of the world automotive battery market. Last month, Samsung signed an agreement with Ford to cooperate in the development of next-generation EV batteries, and it is apparently close to a supply deal with U.S. EV maker Tesla Motors.
Samsung expects to swing to a profit this year powered by growing EV battery business after posting an operating loss of W27.4 billion last year (US$1=W1,027).