South Korea’s Hyundai, LGES to Build $4.3 Billion Battery Plant in the U.S.
- May 26, 2023
- Posted by: Quatro Strategies
- Category: Manufacturing
South Korea’s Hyundai Motor Group and battery manufacturer LG Energy Solution (LGES) signed a joint venture agreement on Friday to build a $4.3 billion electric vehicle (EV) battery plant in the United States, in order to take advantage of tax credits set out by the Inflation Reduction Act (IRA). Manufacturers must comply with new U.S. sourcing requirements for EV battery components and critical minerals so that buyers of their vehicles can qualify for up to $7,500 in tax credits under the IRA. EVs from Hyundai Motor Group brands Hyundai and Kia are currently ineligible for tax credits.
Hyundai and LGES said construction of the factory in the state of Georgia will begin in the second half of 2023, with battery production starting at the end of 2025 at the earliest. It will have an annual production capacity of 30 gigawatt-hours (GWh), enough to power 300,000 EVs.
Hyundai Motor Group, the world’s third-largest automaker by vehicle sales, is also developing EV and battery manufacturing facilities in Georgia’s Bryan County, where its joint factory with LGES will be based.
LGES and Hyundai Motor Group will each own 50% according to the joint venture agreement.
LGES supplies automakers including Tesla and General Motors.
“Two strong leaders in the auto and battery industries have joined hands, and together we are ready to drive the EV transition in America,” LGES CEO Kwon said in a statement.
In April, Hyundai finalized a $5 billion EV battery joint venture in the United States with another South Korean battery maker SK On, boosting electrification efforts in its largest market.
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