Samsung To Cut Fuel Cell Tech Out Of New Business Strategy

South Korea's Samsung SDI has decided to drop its hydrogen fuel-cell division, and focus future development resources exclusively on batteries for electric cars.

Samsung SDI is already a major player in the electric-car battery market, but until recently the company also dabbled in fuel-cell technology, largely the province of Japanese companies supplying Toyota and Honda. But it is something executives are now no longer interested in continuing, according to a recent report by The Korea Times.

Samsung SDI decided to drop its fuel-cell projects because the "outlook of the market isn't good," according to a company spokesperson quoted in the report. The same spokesperson said fuel-cell patents and equipment would be sold to a local company, but would not name the purchaser. Kolon Industries subsequently acknowledged that it had been approached by Samsung SDI about a deal on the equipment and related assets.

Samsung is in the midst of a larger process of cutting projects and product lines it believes to be unprofitable, and redirecting resources to only those it considers will remain core businesses. The company now plans to invest more than 3 trillion won (about $2.5 billion) in electric-car battery development over the next five years and hopes to become the world's top electric-car battery supplier by 2020.

Along with LG Chem, Samsung is already set to supply cells for the all-electric Audi SUV due in 2018, and supplies cells for the BMW i3 and i8. Samsung is also one of several companies reportedly in talks with Tesla Motors to supply battery cells for the automaker's Model 3 electric car. Tesla is already building a massive battery "gigafactory" in Nevada in partnership with Panasonic, currently its sole battery supplier, but to meet CEO Elon Musk's stated goal of selling 500,000 cars per year by 2018—rather than by 2020 as originally planned—Tesla may need additional suppliers to achieve the necessary volume.