Samsung SDI’s Mercedes Windfall Masks Deepening Quarterly Losses

Samsung SDI secures a landmark 10 trillion won battery supply contract with Mercedes-Benz, yet first-quarter 2026 operating losses balloon to 275.6 billion won, spooking investors.

Samsung SDI finds itself in a peculiar spot: celebrating a landmark battery supply deal with Mercedes-Benz while nursing a widening operating loss that has spooked investors. The South Korean battery maker’s stock has swung wildly in recent days, climbing more than 23% over the week despite a bruising earnings miss.

Mercedes-Benz has signed a direct supply contract worth approximately 10 trillion won ($6.8 billion) for prismatic NCM cells with high nickel content. The batteries will power the Stuttgart-based automaker’s next-generation electric SUVs and coupes, with first deliveries scheduled for 2029. The deal marks a strategic breakthrough for Samsung SDI, which now supplies all three major German premium carmakers—BMW, Volkswagen, and Mercedes-Benz.

The euphoria surrounding the contract, however, stands in sharp contrast to the company’s first-quarter 2026 results. Revenue came in at 3.5 trillion won, beating expectations by about 10%. But the operating loss ballooned to 275.6 billion won—and would have exceeded 360 billion won without U.S. government subsidies. Earnings per share missed analyst forecasts by nearly 55%.

At the close of trading Friday, Samsung SDI shares settled at €91.40. Despite the quarterly disappointment, the stock is up more than 132% since the start of the year, reflecting optimism about the company’s long-term positioning in Europe and beyond.

Analysts at NH Investment & Securities believe the first quarter represents the trough for Samsung SDI’s operating performance. They expect a return to profitability in the second half of the year, aided by new European Union regulations that could curb imports of cheaper Chinese batteries.

Uncertainty persists across the Atlantic. Samsung SDI recently extended a 1.6 trillion won loan to its StarPlus Energy joint venture with Stellantis until the end of June 2026. The U.S. automaker is reportedly considering exiting the Indiana-based partnership after booking hefty write-downs. Samsung SDI is trying to fill the plant’s capacity by pivoting toward stationary energy storage customers.

Investors will get more clarity on April 28, when management hosts a conference call at 10 a.m. to discuss first-quarter results and outline strategy for the U.S. and European operations.