Samsung SDI's 2026 EV Demand Forecast and Global Battery Supply Chain Implications

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Samsung SDI’s forecast of a

coupled with represents a significant regional divergence that will fundamentally reshape global battery supply chain strategies, capital allocation decisions, and investment priorities. This analysis examines the structural factors driving these trends, their implications for battery manufacturers, and strategic responses available to industry participants.

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Samsung SDI reported its Q4 2025 results, revealing continued headwinds in its battery business:

Metric	Q4 2025	Q4 2024
Net Profit	207.8 billion won (~$142.4M)	Loss of 242.7 billion won
Operating Loss	299.2 billion won	256.7 billion won
Sales	3.85 trillion won (+2.8% YoY)	—
Battery Business Loss	338.5 billion won	—

The company’s battery segment operating loss of

was primarily attributed to weakness in the US electric vehicle market, while the energy storage system (ESS) division helped limit further deterioration [1].

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Several converging factors explain the projected 9% decline in US EV demand:

The US EV market faces significant policy headwinds that are dampening consumer demand and OEM investment [2]:

Factor	Impact
Tariffs	10% baseline tariff on EV components, batteries, and chargers; de-minimis duty-free suspension in 2026
Tax Credit Termination	Federal EV credit (30D) and used-EV credit (25E) expired September 30, 2025
Infrastructure Delays	NEVI state-level plan approvals frozen (February 2025); no new corridor-fast-charging obligations
CAFE Standards	NHTSA’s “SAFE Rule III” lowers stringency and removes EV credits from calculations

• EVs currently represent approximately
  11% of US new-car sales
  versus 16.9% in the EU and 60% in China [2]
• Price premiums of 15-20% over internal combustion vehicles persist
• Limited model availability in the affordable segment (below $45,000)
• Only 16% of available BEV models fall within the affordable price range [3]

The European market demonstrates resilience despite subsidy reductions:

Metric	2025 Data	Significance
Plug-in Vehicle Sales	3.8 million units (+33% YoY)	Strong underlying demand
EU BEV Market Share	16.9% of new car sales	Market penetration accelerating
Public Chargers	>1 million units (excluding Norway/Switzerland)	Infrastructure scaling
Charging Speed	350-400 kW average; 600 kW (Ionity)	Long-distance viability

The EU’s regulatory framework—mandating 100% zero-emission new cars by 2035—provides structural support for continued EV adoption regardless of short-term incentive fluctuations [4].

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The projected 9% decline in US EV demand creates significant oversupply risks for battery manufacturers who have invested heavily in North American capacity:

Factor	Implication
Announced US Battery Capacity	>500 GWh by 2026 (via IRA incentives)
Revised Demand Forecast	Potentially 9% below previous expectations
Utilization Rates	Risk of falling below 60% for new facilities
Cost Structure	Fixed costs per GWh increase as utilization drops

The EU’s projected 9% growth creates opportunities for supply chain realignment:

Strategic Shift	Description
Localization Acceleration	EU Battery Regulation (EU) 2023/1542 driving local content requirements
Gigafactory Development	Major manufacturers establishing European production hubs
Raw Material Security	Critical Raw Materials Act reducing dependency on single suppliers
Recycling Infrastructure	Battery Passport requirements necessitating circular economy investments

Capital flows are expected to shift significantly:

2024-2025: North America-focused expansion
                    ↓
2026-2027: European capacity acceleration
                    ↓
2028+: Balanced global portfolio with EU emphasis

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Battery manufacturers should expand into non-automotive applications to offset EV demand weakness:

Application	Growth Potential	Rationale
Energy Storage Systems (ESS)	High	Grid-scale storage demand accelerating
Robotics & AI Data Centers	High	Computing power demand surge
Power Tools	Moderate	Established market with upgrade cycle
Consumer Electronics	Stable	Mature but consistent demand

Samsung SDI’s strategic focus on ESS orders and partnerships with BMW for all-solid-state battery technology exemplifies this approach [1].

• Modular manufacturing lines
  that can switch between cell chemistries
• Contract manufacturing arrangements
  to adjust capacity without capital commitment
• Multi-product facilities
  serving both automotive and industrial customers

Given higher landed costs from tariffs and reduced economies of scale:

Strategy	Implementation
Vertical Integration	In-house component production (anodes, cathodes)
Regional Sourcing	Reduce import dependency through local supplier development
Process Automation	Labor cost reduction to offset lower utilization
Energy Efficiency	Manufacturing cost reduction through renewable energy adoption

The 9% EU growth forecast suggests capital should flow toward:

Priority	Investment Focus
Gigafactory Construction	Facilities in Germany, Poland, Hungary, Sweden
Supply Chain Integration	Local sourcing of lithium, nickel, cobalt, graphite
R&D Centers	Next-generation battery technology development
Recycling Operations	Closing the loop on battery materials

With Chinese competition intensifying (Chinese-brand plug-ins doubled EU share from 3.4% to 6%), differentiation becomes critical:

Technology	Investment Priority	Competitive Advantage
All-Solid-State Batteries	High	Safety, energy density
High-Nickel Cathodes	Medium	Range, cost efficiency
Sodium-Ion Batteries	Medium	Cost, sustainability
Advanced BMS	High	Performance optimization

Samsung SDI’s partnership with BMW to validate all-solid-state battery technology positions the company for premium segment capture [1].

European OEM relationships should be balanced across:

Customer Type	Strategic Value
Premium German OEMs	Technology leadership, premium pricing
Volume Manufacturers	Scale, utilization optimization
Emerging Chinese Brands (Europe)	Market access, competitive intelligence
Commercial Vehicle Manufacturers	Adjacent market diversification

Industry leaders like LG Energy Solution have already begun strategic reallocation:

• Reallocated
  20% of gigafactory capacity
  away from automotive risk
• Diversified product line across battery types
• Invested in solid-state battery technology
• Balanced geographic exposure across Korea, US, EU, and China

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Investment Theme	Recommendation	Time Horizon
US Battery Capacity	Cautious; prioritize flexibility	Short-term
EU Battery Expansion	Favorable; localization plays	Medium-term
ESS Technology	Overweight; structural growth	Medium-term
Battery Materials	Neutral; commodity exposure selective	Medium-term
Recycling Infrastructure	Favorable; regulatory tailwind	Long-term

Risk	Probability	Impact
Further US policy deterioration	Medium	High
EU implementation delays	Medium	Medium
Chinese competitive intensification	High	High
Raw material price volatility	Medium	Medium
Technology disruption (solid-state)	Medium	High

Current (2025):
[China: 60%+ EV share] → [EU: 16.9%] → [US: 11%]
                          ↑
              (9% growth projected)

Projected 2026:
├── North America: Capacity rationalization, consolidation
├── Europe: Capacity acceleration, localization push
└── Global: Regional rebalancing with technology differentiation

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Samsung SDI’s forecast of a

for 2026 reflects a fundamental realignment of the global EV market. The divergence is driven by:

1. US headwinds
   : Policy uncertainty (tariffs, tax credit expiration), infrastructure delays, and price sensitivity
2. EU tailwinds
   : Regulatory mandates, infrastructure scaling, and demonstrated consumer adoption resilience

Market	Primary Strategy
United States	Risk mitigation through diversification, production flexibility, and cost optimization
European Union	Growth capitalization through capacity expansion, localization, and technology leadership
Global Portfolio	Regional rebalancing with emphasis on non-automotive applications and technology differentiation

The transition period through 2026 will likely witness significant supply chain restructuring, capacity reallocation, and potentially industry consolidation as market participants adjust to these divergent regional dynamics.

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[1] Yonhap News Agency – Samsung SDI Q4 2025 Results (https://en.yna.co.kr/view/AEN20260202006451320)

[2] Battery Tech Online – 11 Trump Policies That Hurt US EV Market Growth (https://www.batterytechonline.com/automotive-mobility/11-trump-ev-policies-that-hurt-us-automaker-competitiveness)

[3] PwC – Automotive Industry Outlook 2026 (https://www.pwc.com/us/en/industries/industrial-products/library/automotive-industry-outlook.html)

[4] Evdances – Europe’s EV Market Grew in 2025—But 2026 Will Decide Its Future (https://evdances.com/blogs/news/europe-s-ev-market-grew-in-2025-but-2026-will-decide-its-future)

[5] Bloomberg – Electric Vehicles Have a Bumpy Road Ahead in 2026 (https://www.bloomberg.com/news/newsletters/2026-01-06/electric-vehicles-have-a-bumpy-road-ahead-in-2026)

[6] Volt Insight Briefing – US Critical Mineral Talks, Tesla’s Magnet (https://voltrush.substack.com/p/volt-insight-briefing-us-critical)