Another EV battery plant will soon rise in the US courtesy of Hyundai and LG Energy.
The two companies have recently agreed to partner with each other to establish an EV battery plant in the US as their joint venture to produce EV batteries for Hyundai's US market.
Both companies expect their joint venture battery plant will become operational by the end of 2025.
Hyundai-LG Energy Joint Venture Details
Hyundai mentioned in its announcement that it had partnered with LG Energy Solution (LGES) to produce EV batteries in the US and further accelerate its own electrification efforts in the country.
Hyundai President and CEO Jaehoon Chang and LG Energy CEO Youngsoo Kwon inked the memorandum of understanding forms the backbone of the partnership in LGES' headquarters in Seoul. According to the memorandum, both companies would have an even stake in the resulting EV battery plant, with both companies contributing $4.3 billion to establish the EV battery plant.
The upcoming battery plant's coal is to have an annual production capacity of 30GWh (gigawatts per hour) and be capable of supporting the production of 300,000 EV units annually. Hyundai Mobis, a public South Korean car parts company, would assemble battery packs within the upcoming plant and then supply them to Hyundai's US manufacturing facilities to produce Hyundai, Kia, and Genesis EVG models.
As a result, the battery plant will help create a stable supply of EV batteries in the country and North American region and allow Hyundai to respond to "the soaring EV demand" in the US market.
Should the new EV battery plant be established as planned, this new plant, located in Bryan County, Savannah, Georgia, would become the seventh battery plant Hyundai is operating or constructing in the US. For this battery plant, Hyundai and LG Energy will begin construction in the second half of 2023 and are expected to start battery production at the end of 2025 at the earliest.
Why The US Again?
Hyundai wants to increase local EV battery production in the US to provide "innovative products" at scale and speed, which will help expedite the US' efforts to switch to clean, sustainable energy.
Chang said that Hyundai wants to focus on its electrification efforts to become the leading company in the global auto industry. To do so, it wants to create "a strong foundation" to lead the global EV transition - establishing its seventh battery plant in the region with LG Energy is part of its efforts to create the said foundation.
Additionally, the establishment of Hyundai's seventh battery plant in the US would allow buyers of their vehicles to qualify up to $7,500 in tax credits under the Inflation Reduction Act, per Reuters. However, it must follow new US sourcing requirements for EV battery components and critical minerals before the company's eligible for the tax credit.
Vehicles from Hyundai and its sisyter automaker, Kia, are currently not eligible for the tax credit.
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