Hyundai, SK On to build $4.9 bn EV battery plant in US

SEOUL: Hyundai Motor Group said on Tuesday it will build a 6.5 trillion-won ($4.9 billion) electric vehicle (EV) battery plant in the United States with SK Group's battery unit SK On.

Hyundai Motor Group's three major affiliates -- Hyundai Motor, Kia and Hyundai Mobis -- approved the investment plan at their separate board meetings held Tuesday. SK On plans to hold a board meeting to approve the plan on Thursday.

Under a 50:50 joint venture, Hyundai Motor Group and SK On plan to build the battery plant in Bartow County, Georgia, with a goal to start production in the second half of 2025, Hyundai Motor Group said, reports Yonhap news agency.

The battery plant will produce batteries with 35 gigawatt hours (GWh) of capacity a year, and most of the batteries will be used to assemble about 300,000 EVs a year in Hyundai Motor and Kia's US plants, it said.

The new battery plant will be located near Hyundai's Alabama plant, Kia's Georgia plant, and the automotive group's dedicated EV and battery plant under construction in Georgia.

Hyundai Motor and Kia together form the world's third-biggest carmaker by sales after Toyota Motor and Volkswagen Group.

The announcement came five months after Hyundai Motor Group signed a memorandum of understanding with SK On to source EV batteries in the US from the battery maker.

The Inflation Reduction Act (IRA), signed into law by US President Joe Biden in August, gives up to $7,500 in tax credits to buyers of EVs assembled only in North America, sparking concerns that Hyundai Motor and Kia could lose ground in the US market, as they make most of their EVs at domestic plants for export to the US.

The IRA also requires EV batteries to be made with a certain proportion of minerals mined or processed in the US or countries or regions that have free trade agreements with Washington.

In October, Hyundai Motor Group began the construction of a 300,000-unit-a-year EV and battery plant in Georgia, aiming to begin commercial production in the first half of 2025.

Early this year, Hyundai Motor began to produce the all-electric GV70 SUVs under its independent Genesis brand at the Alabama plant.