Samsung warns US tariffs may increase EV costs

Samsung SDI, a South Korean battery manufacturer, announced on April 25, 2025 that United States tariffs on imported materials and components will raise production costs for its electric vehicle (EV) batteries in the US.

Kim Yoon-tae, Executive Vice President of Samsung SDI, said during the company’s first-quarter earnings call that while battery production takes place in the US, imported materials are subject to tariff-related expenses.

He noted that EVs produced by customers in Mexico and Canada could also incur tariffs.

This situation could potentially increase vehicle prices and reduce demand.

Samsung SDI supplies batteries to several automakers, including BMW, Rivian, General Motors, and Stellantis.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Tariffs reshaping the global battery supply chain landscape

Samsung SDI’s cautionary statement about rising costs reflects a broader industry trend where tariffs are restructuring global battery supply chains.

The recent 145% tariff on Chinese lithium-ion batteries represents a significant shift for the industry, affecting $15.3 billion worth of batteries that China exported to the U.S. in 2023 alone 1.

This creates an opportunity for Samsung SDI and other Korean manufacturers to capture market share from Chinese competitors, who previously held an 87% share of the North American energy storage system market 1.

Companies are responding by accelerating localization strategies. For example, Samsung SDI plans to produce LFP cells in Ulsan, Korea, and then ship them to Michigan for final assembly to minimize tariff impacts 2.

This shift toward regional production hubs reflects a growing trend of “nearshoring” across manufacturing sectors aiming to reduce tariff risks while maintaining competitive pricing.

2️⃣ The tariff ripple effect through complex EV supply chains

Samsung SDI’s warning about imported materials highlights how tariffs affect multi-layered supply chains, creating compounding cost pressures.

Manufacturing modern EV batteries involves globally sourced components, where even batteries “made in America” contain numerous imported elements that become subject to tariffs, potentially increasing production costs by 3.9% or more 3.