South Korea’s Hyundai Motor Group and LG Energy Solution will invest 5.7 trillion won ($4.3 billion) to produce electric-car batteries in the US to comply with President Joe Biden’s clean energy tax law, which seeks to encourage domestic production and reduce reliance on Chinese suppliers.
The Hyundai group — which includes Hyundai Motor Co., Kia Corp. and Genesis — and LG Energy will split the investment 50-50, according to a statement Friday. The plant, in Bryan County, Georgia, will have an annual capacity of 30 GWh, enough to power 300,000 electric vehicles, the carmaker said.
Construction will start in the second half of 2023 and production will begin as early as the end of 2025.
“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, Hyundai Motor said in the statement.
Automakers and EV battery makers alike are increasingly rushing to make investments in North America in order to receive tax credits provided by Biden’s landmark climate change bill, the Inflation Reduction Act. Carmakers are also seeking to diversify their supply of EV batteries, a market that’s dominated by China’s Contemporary Amperex Technology.
Hyundai is planning to invest $5 billion on another battery plant with SK On Co. in Georgia. Affiliate Hyundai Mobis Co. will make battery packs to supply EVs built at at Hyundai’s new plant in Georgia.
“Two strong leaders in the auto and battery industries have joined hands, and together we are ready to drive the EV transition in America,” said Youngsoo Kwon, chief executive officer of LG Energy Solution.
Hyundai and Kia delivered around 119,000 EVs during the first quarter of 2023, down 2.2% from a year ago, according to SNE Research, a Seoul-based research firm.