Hyundai and LG Energy Solution's Joint Investment in US Battery Plant Drives EV Transition.

Introduction:

In a significant move towards supporting President Joe Biden's clean energy tax law and reducing reliance on Chinese suppliers, South Korea's Hyundai Motor Group and LG Energy Solution have announced a joint investment of 5.7 trillion won ($4.3 billion) to establish an electric vehicle (EV) battery production facility in the United States. The investment will be split equally between the two companies, marking a strategic collaboration between Hyundai Motor Group, comprising Hyundai Motor Co., Kia Corp., and Genesis, and LG Energy Solution, a prominent global battery producer.

Key Details:

Investment Details: Hyundai Motor Group and LG Energy Solution will invest 5.7 trillion won ($4.3 billion) in constructing an EV battery plant in Bryan County, Georgia. The facility's annual capacity is projected to reach 30 GWh, enough to power approximately 300,000 electric vehicles.

Tax Incentives: The investment aligns with President Biden's climate change bill, the Inflation Reduction Act, which offers tax credits to automakers and EV battery manufacturers who invest in domestic production. This incentivizes companies to expand their operations in North America and reduce dependence on Chinese suppliers.

Production Timeline: Construction of the battery plant is scheduled to commence in the second half of 2023, with production anticipated to begin by the end of 2025. This timeline reflects the commitment of both companies to ramp up their EV production capabilities in response to the growing demand for electric vehicles.

Diversification and Collaboration: The partnership between Hyundai Motor Group and LG Energy Solution aims to diversify the supply of EV batteries and challenge the dominance of China's Contemporary Amperex Technology Co. Ltd. By collaborating with LG Energy Solution, a renowned battery producer and long-term partner, Hyundai intends to establish a strong foundation to lead the global EV transition.

Hyundai's Battery Plant Investments:

Hyundai-SK On Co. Partnership: Hyundai is also planning a separate $5 billion investment in Georgia for another battery plant in collaboration with SK On Co. This initiative highlights Hyundai's commitment to expanding its battery production capacity in the United States.

Hyundai Mobis Co.'s Role: Affiliate company Hyundai Mobis Co. will manufacture battery packs to supply EVs produced at Hyundai's new plant in Georgia, ensuring a comprehensive and integrated approach to EV production.

Conclusion:

The joint investment by Hyundai Motor Group and LG Energy Solution to establish an EV battery plant in the United States demonstrates their commitment to President Biden's clean energy tax law and their proactive approach to reducing reliance on Chinese suppliers. With their combined expertise and resources, the two companies aim to drive the global EV transition by strengthening domestic battery production capabilities. This investment not only supports the growth of the EV market but also contributes to job creation and technology advancement in the United States.