German luxury automaker Mercedes-Benz has signed its first-ever electric vehicle battery supply agreement with South Korea’s Samsung SDI, marking a significant step in the global shift toward electrification and deeper collaboration across the automotive supply chain.
The multi-year deal, announced on April 20, will see Samsung SDI supply advanced batteries for Mercedes-Benz’s next generation electric vehicles, particularly compact and mid-size models.
At the core of the agreement is the use of high-nickel NCM battery chemistry, a combination of nickel, cobalt, and manganese that is widely regarded as a high-performance solution in the EV market. These batteries are designed to deliver longer driving ranges, improved durability, and higher energy efficiency, all key factors in addressing consumer concerns around electric mobility.
Mercedes-Benz plans to deploy the batteries in its upcoming electric SUVs and coupe-style vehicles, as part of a broader strategy to strengthen its position in the premium EV segment.
Beyond supply, the two companies have also agreed to collaborate on the development of next generation battery technologies, signalling a deeper strategic partnership that extends beyond a simple buyer-supplier relationship.
This partnership is particularly significant for Samsung SDI. While the company already supplies batteries to major global manufacturers such as BMW, Volvo, and Jaguar Land Rover, this marks its first direct supply deal with Mercedes-Benz, one of the world’s leading luxury car brands.
Industry analysts see the deal as part of a broader trend in which automakers are diversifying their battery supply chains to reduce dependence on a limited number of suppliers. Mercedes-Benz has historically relied heavily on other battery manufacturers, including LG Energy Solution and SK On, but the addition of Samsung SDI introduces greater flexibility and resilience.
Although the companies did not officially disclose the financial value or volume of the contract, reports suggest that supply levels could reach tens of gigawatt hours over the life of the agreement, potentially making it one of Samsung SDI’s largest automotive deals.
The timing of the agreement is also notable. The European automotive market is undergoing rapid transformation as regulators push for stricter emissions standards and governments accelerate the transition to electric vehicles. However, one of the biggest challenges facing the EV industry remains affordability, particularly in the premium segment.
By securing a new battery partner, Mercedes-Benz is positioning itself to scale production more efficiently and potentially reduce costs over time. This could help the company expand its EV lineup while maintaining its brand identity in the luxury market.
For Samsung SDI, the deal strengthens its footprint in Europe, one of the fastest growing EV markets globally. It also reinforces its ambition to compete with other major battery producers, particularly as demand for electric vehicles continues to surge worldwide.
The partnership reflects a broader shift in the automotive industry, where control over battery technology is becoming just as critical as vehicle design. As EV adoption accelerates, automakers are increasingly investing in long-term battery partnerships to secure supply, improve performance, and drive innovation.
Mercedes-Benz Chief Technology Officer Jörg Burzer highlighted this strategic importance, noting that collaboration with technologically advanced partners is key to advancing electrification and digitalisation within the company’s future mobility plans.
Ultimately, the agreement signals more than just a supply deal. It represents a convergence of automotive engineering and advanced battery technology, two industries that are now inseparably linked in shaping the future of transportation.
As competition intensifies and demand grows, partnerships like this are expected to play a central role in determining which companies lead the next phase of the electric vehicle revolution.
