South Korean automaker Hyundai Motor Group and its battery supplier LG Energy Solution Ltd have announced their plan to build a $4.3 billion electric vehicle (EV) battery plant in the United States. This joint venture will significantly expand Hyundai's presence in the world’s second-largest market for electric vehicles, where it has so far lagged behind some other rivals.
The new factory will be constructed in the state of Georgia and will begin construction in the second half of 2023, with battery production starting sometime in 2025. The plant will have an annual production capacity of 30 gigawatt-hours, which is enough for 300,000 electric vehicles, meeting new US sourcing requirements for EV battery components in order to qualify for lucrative tax credits under the Inflation Reduction Act (IRA). Interestingly, Hyundai and Kia cars are currently not eligible for such tax credits.
LG Energy Solution currently supplies to automakers such as Tesla and General Motors and will hold a 50% stake in this new joint venture with Hyundai Motor Group, which includes Hyundai, Kia and Hyundai Mobis. The two firms aim to drive the EV transition in America by combining their strengths in the automotive and battery industries.
This move follows Hyundai's recent $5 billion EV battery joint venture with SK On, a battery unit of SK Innovation Co Ltd, in the United States. That deal helped boost the company’s electrification efforts in the country.
With this latest investment into the US market, Hyundai and LG Energy Solution are further positioning themselves to be significant players in the race for greater EV adoption in the country.