Hyundai and LG Join Forces to Build a $4.3 Billion EV Battery Plant in the US

Hyundai and LG Join Forces to Build a $4.3 Billion EV Battery Plant in the US

A partnership that highlights the remarkable growth of the electric vehicle (EV) industry, Hyundai Motor Group and LG Energy Solution (LGES), both Korean firms, have joined forces to establish a cutting-edge EV battery manufacturing plant in the United States.

This strategic collaboration takes advantage of the tax incentives offered by the government to support eco-friendly initiatives.

With a massive investment of $4.3 billion, the joint venture (JV) aims to meet the surging demand for electric vehicles while solidifying the market positions of both companies globally.

LG Energy Solution and Hyundai Motor Group will hold an equal 50 percent stake in the venture.

The firms have set an ambitious goal to achieve a yearly production capacity of gigawatt-hours (GWh), which can power approximately 300,000 EVs in North America.

“We will create a strong foundation to lead the global EV transition by establishing a new EV battery cell plant with LG Energy Solution, a leading global battery producer, and long-time partner,” stated Jaehoon Chang, President and CEO of Hyundai Motor Company.

The battery manufacturing facility will be situated in Bryan County, Savannah, Georgia, adjacent to Hyundai Motor Group Metaplant America, which is currently under construction.

Tax Breaks: Promoting Domestic Manufacturing

To qualify for tax rebates, US manufacturers must meet specific sourcing requirements for EV battery components and minerals.

Complying with these requirements enables EV buyers to receive tax credits of up to $7,500, as mandated by the Inflation Reduction Act (IRA).

These regulations form part of President Joe Biden’s initiative to have 50% of new vehicle sales in the United States consist of EVs or plug-in hybrids by 2030.

The aim is to reduce the country’s reliance on China for EV battery supply chains.

The construction of the new facility is scheduled to commence in the second half of 2023, with production expected to begin at the end of 2025.

Notably, this marks the second joint venture between these brands in battery manufacturing. In 2021, both companies initiated the construction of a facility in Indonesia, with production slated to start in the first half of 2024.

Boosting the Hyundai Ecosystem’s Transition to EVs

The battery cells manufactured at the new plant will be assembled by Hyundai Mobis and subsequently shipped to Hyundai, Kia, and Genesis EV manufacturing facilities.

This integration will enable the group to establish a stable battery supply chain in the region and respond swiftly to the escalating demand for EVs in the US market.

With this joint venture, LG Energy Solution now operates or is in the process of building seven battery factories in the United States.

The company is primarily focusing its efforts on increasing output to deliver advanced products rapidly and at scale. By doing so, LG Energy Solution aims to accelerate the transition to clean energy in the United States.

LG Energy Solution and Hyundai Motor Group have enjoyed a longstanding partnership in supplying EV batteries for various vehicles, including the Elantra Hybrid, Kona Electric, and IONIQ 6 dedicated EVs.

The Hyundai Elantra Hybrid, the group’s first electric model introduced in 2009, holds particular significance.

This collaboration is poised to strengthen the ties between the brands and facilitate further cooperation in the EV battery sector.

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