SEOUL, May 26 (Yonhap) — Hyundai Motor Group and LG Energy Solution announced Friday that they have decided to invest 5.7 trillion won in a battery cell factory in the United States, which is expected to start operating in 2025.
The two South Korean companies will form a 50-50 joint venture later this year that will manage the project. The plant is expected to have an annual capacity of 30 gigawatts and will be located near Hyundai Motor’s electric vehicle (EV) and battery plant, Hyundai Motor Group Metaplant America (HMGMA), being built in the State of Georgia, according to their releases. The new company will supply battery cells not only to HMGMA but also to Hyundai Motor’s plant in Alabama and a site in Georgia that is owned by a subsidiary of Kia Corp.
“Hyundai Motor Group is shifting its focus to electric vehicles and intends to become a leader in the EV market through this battery cell factory project,” the chairman and CEO of Hyundai Motor.
The investment comes as the Inflationary Reduction Act (IRA), signed by US President Joe Biden into law last August, allows new EV buyers to benefit from up to $7,500 in tax credits if these were assembled on US soil. In April of this year, the conditions became more difficult, and now require more than 50% of the battery components or 40% of the minerals necessary for its production from the United States or from a country where there is an agreement. free trade agreement (FTA).
This decision had raised many concerns about Hyundai and Kia’s market share in the US, as most of their electric cars are assembled in Korea before being shipped to the US. In October, Hyundai Motor announced the construction of HMGMA, which is expected to produce 300,000 vehicles per year.