Due to the newly introduced US reciprocal tariffs, several companies, including Samsung SDI, are concerned about their future business. Samsung SDI, a subsidiary of Samsung, which manufactures and supplies batteries to other companies, recently said that the tariffs will have a heavy impact on its pricing strategy. It said that the tariffs on electronic materials imposed by the US Government will cause an increase in production costs for EV batteries.
US tariffs are not directly impacting battery production, but imported materials raise costs
Batteries are a crucial part of most electronic products, from smartphones to EVs. Many companies import components for EV batteries, mainly from China. While the US government has introduced exceptions on some products, many imported components still suffer from reciprocal tariffs.
During the first-quarter earnings conference call (via Reuters), Samsung SDI’s Executive Vice President Kim Yoon-tae said, “While the production of EV batteries takes place in the United States, there is no direct tariff impact. However, many materials and components are imported from outside the U.S., which is expected to increase cost burdens.”
Samsung SDI has many customers for batteries, including BMW, Rivian, General Motors, and Stellantis. The production sites are in the US, South Korea, Hungary, and China. Kim said that EVs in Mexico and Canada may also see a price hike due to tariffs, and that could lead to lower demand.
Samsung SDI currently has two options regarding this — either it can pass on the costs to customers or absorb the costs and lower its profits. While Kim has not specified which route the company is taking, it may find a solution that balances both approaches.
Kim said that tariffs are still a burden on any company’s financial performance. The company will closely monitor any changes in tariff rules and work with customers to reduce the effects. Only time will tell how tariffs will impact the overall EV market.
