Hyundai Motor Group has announced its plans to purchase a 5% stake in Korea Zinc Co., the world's largest smelter for non-ferrous metals, in a strategic move to secure access to key metals required for producing electric vehicle (EV) batteries. The group, which controls Hyundai, Kia, and Genesis brands, has signed a partnership agreement with the smelter aimed at jointly developing a "nickel value chain" that encompasses the procurement, processing, and recycling of nickel, a crucial component of EV batteries.
As part of the partnership, Hyundai will invest 527.2 billion won ($398 million) to acquire shares in Korea Zinc. The collaboration is seen as vital for Hyundai's goal of purchasing 50% of the nickel it requires for EV batteries through the partnership by 2031. This move aligns with the Inflation Reduction Act presented by President Joe Biden, which encourages car manufacturers to source EV components from locations outside of China.
Furthermore, the supply chain established through this partnership will meet European requirements for sourcing critical minerals, as well as comply with other environmental, social, and governance (ESG) rules. Hyundai aims to cement its position as one of the world's top three EV makers by producing 3.64 million EVs annually by the end of this decade.
While Hyundai has denied speculations about producing its own lithium-ion batteries, it has acknowledged its interest in exploring solid-state batteries. Back in July, Hyundai opened a research center in collaboration with Seoul National University with the aim of developing next-generation batteries. This partnership with Korea Zinc will help Hyundai strengthen its position in the EV market while ensuring a sustainable and reliable supply of crucial metals needed for battery production.