South Korea’s Hyundai Motor Group and LG Energy Solution Ltd. plan to invest 5.7 trillion won ($4.3 billion) to build an electric vehicle (EV) battery plant in the United States as part of a push to “drive the EV transition in America” and take advantage of tax credits provided by the Inflation Reduction Act (IRA).
The two companies signed a memorandum of understanding to produce EV batteries in the United States and “further accelerate Hyundai’s electrification efforts in North America,” on May 26, according to a statement.
Hyundai and LGES will each hold a 50 percent stake in the joint venture.
The new plant will be located in Bryan County, Savannah, Georgia where Hyundai Motor Group Metaplant America is currently being built and will have an annual capacity of 30 GWh, enough to power 300,000 electric vehicles, the carmaker said.
Construction of the factory will begin in the second half of 2023, with battery production starting at the end of 2025 at the earliest.
“We will create a strong foundation to lead the global EV transition through establishing a new EV battery cell plant with LG Energy Solution, a leading global battery producer, and long-time partner,” Jaehoon Chang, CEO of Hyundai Motor Co., said in the statement.
Youngsoo Kwon, CEO of LG Energy Solution said the two auto and battery leaders are “ready to drive the EV transition in America.”
Tax Incentives Driving EV Battery Production
The joint venture marks Hyundai’s second battery partnership with LG after it announced the construction of a $1.1 billion battery cell plant located in Karawang New Industry City, near Jakarta, Indonesia, in 2021.The latest deals come as automakers and battery companies are swiftly ramping up EV battery production in North America driven by President Joe Biden’s IRA, which provides $369 billion in renewable energy incentives, including a $7,500 federal EV tax credit for cars assembled in North America.
The incentives—part of Biden’s efforts to reduce reliance on China—require that a certain percentage of the battery’s critical materials and components are sourced domestically or from countries with which the United States has a free trade agreement in order to qualify for the tax credits.
Sen. Jon Ossoff (D-Ga.), who recently led a trade mission to South Korea to discuss the deal with the two companies, welcomed the announcement in a statement Thursday.
Ossoff said his state now ranks second nationwide in new investment from IRA manufacturing incentives.
“When I led a trade delegation to South Korea last month, securing this LG-Hyundai battery investment to Georgia was a key goal. The IRA’s manufacturing incentives continue to bring jobs and investment to Georgia,” Ossoff said. “My goal remains to make Georgia the world leader in advanced energy production. I thank LG Chairman Koo Kwang-mo, LG Energy Solutions President David Kim, Hyundai Chairman Chung Eui-sun, Senator Reverend Warnock, and all local and state officials who made today’s historic announcement possible.”
Friends Read Free