In an effort to benefit from tax credits, South Korea’s Hyundai Motor Group and LG Energy Solution Ltd announced on Friday that they will construct a $4.3 billion electric vehicle (EV) battery plant in the United States.
To be eligible for up to $7,500 in tax credits under the Inflation Reduction Act (IRA), purchasers of manufacturers’ vehicles must comply with new US sourcing standards for EV battery components and key minerals.
Currently, Hyundai Motor Co. and sister company Kia Corp. vehicles are ineligible.
According to Hyundai and LGES, the Georgian factory’s construction will commence in the second half of 2023, and battery production won’t start until at least the end of 2025.
According to them, it will have a 30 GWh yearly production capacity, which is sufficient to power 300,000 EVs.
The combined plant between Hyundai Motor Group and LGES will be located in Bryan County in the state, which is home to the third-largest automaker in the world by vehicle sales.
50% of the joint venture will be owned by LGES and Hyundai Motor Group, which includes Hyundai Motor, Kia, and autoparts maker Hyundai Mobis Co Ltd.
LGES supplies companies like General Motors and Tesla (TSLA).
“Two strong leaders in the auto and battery industries have joined hands, and together we are ready to drive the EV transition in America,” LGES CEO Youngsoo Kwon said in a statement.
In order to accelerate electrification efforts in its biggest market, Hyundai Motor finalized a $5 billion EV battery joint venture in the United States with SK On, a battery division of SK Innovation Co Ltd.