EC approves Eur89.6 mil Hungarian investment aid to Samsung SDI's gigafactory

The European Commission has approved Eur89.6 million ($95.1 million) in state aid to support the expansion of battery maker Samsung SDI's electric vehicle battery cell production facility in Göd, Hungary, the EC said Feb. 28.

The Commission said it had found the measure to be in line with EU state aid rules and the funds would contribute to the development of the region and to job creation, while preserving competition.

Samsung SDI decided in December 2017 to invest Eur1.2 billion to expand the production capacity of its existing facility, with Hungary notifying the EC in 2018 of its plans to grant Eur108 million of public support for the project.

The EC then opened an in-depth investigation into the funding in October 2019 to assess whether the measure was compatible with state aid guidelines, with the scope of the investigation extended in June 2021.

It found that the positive effects of the project on regional development clearly outweighed any distortion of competition brought about by the state aid, which led to the approval.

Its finding also included that the project would not have been carried out in Hungary or any other EU country without public support and that the regional investment aid would contribute to job creation, economic development and to the competitiveness of a disadvantaged region.

The EC also found that the aid should be limited to the minimum necessary to encourage Samsung SDI to carry out the investment in Hungary, it was therefore reduced from Eur108 million to Eur89.6 million.

The aid was granted in December 2021, subject to EC approval, and Samsung SDI's plant reached full production capacity in January 2022.

The plant is able to supply more than 6 million/month of battery cells to customers mainly in the European Economic Area.

Platts, part of S&P Global Commodity Insights, assessed seaborne lithium carbonate and lithium hydroxide at $65,000/mt CIF North Asia and $72,100/mt CIF North Asia Feb. 28, down 13% and 11%, respectively, since the start of 2023.