To Attract Investment from Korean Companies
A growing number of North American political and business leaders are visiting South Korea, either to attract Korean companies’ factories to their regions or to overcome supply chain disruptions in cooperation with Korean partners.
Since the U.S. Inflation Reduction Act (IRA) took effect on Oct. 16, a total of seven major North American figures have visited or are scheduled to visit Korea to meet with Korean businessmen.
They include Georgian Economic Development Minister Pat Wilson, Indiana Governor Eric Holcomb, Alberta Governor Jason Kenny, Arizona Governor Doug Ducey, Ontario Economic Development Minister Victor Fedeli, Maryland Governor Larry Hogan, and Ford CEO Jim Farley.
The list of North American VIPs visiting Korea is expected to lengthen, as many Korean battery cell and material companies are building more than 10 plants in North America individually or in collaboration with U.S. automobile companies.
The reasons why they came to Korea slightly vary, but they mostly encourage Korean companies to make investment in their regions. Indiana Governor Eric Holcomb and Arizona Governor Doug Ducey flew into Korea in late August and visited Korean battery companies to persuade them to set up new plants in their states.
Officials of Canadian provinces rich in battery mineral resources also rushed to visit Korea. Alberta Governor Jason Kenny reportedly visited Korea from Aug. 27 to 31. Kenny met with POSCO Group chairman Choi Jung-woo and explained the value of a big lithium salt lake in Alberta. Victor Fideli, minister of economic development, job creation and trade of Ontario, which is rich in nickel and cobalt, visited LG Energy Solutions and Samsung SDI to discuss the construction of battery factories in Ontario.
Korean battery companies and carmakers have a growing presence in the global electric vehicle market. This explains why North American VIPs are visiting Korea one after another.
According to SNE Research, three Korean battery makers -- LG Energy Solution, SK On, and Samsung SDI -- accounted for 55.6 percent of the global electric vehicle battery usage except China from January to July this year. The combined production capacity of the new plants that the three Korean battery companies will put into operation in the second half of this year amounts to 63 GWh. This volume can power more than 880,000 electric vehicles.
LG Energy Solution’s Ohio plant and SK On’s Georgia plant will begin their full operations this year. The Korean battery makers are establishing a close cooperation system with the three big U.S. automakers -- GM, Ford, and Stellantis. As Toyota and Volkswagen drew up plans to build battery plants in the United States, they are likely to cooperate with Korean battery makers in the United States.
Hyundai Motor Group sold 3,299,000 units of cars worldwide in the first half of this year, ranking third in the global market after Japan’s Toyota Group (5,138,000 units) and Germany’s Volkswagen Group (4,06,000 units). In the electric vehicle industry, it is ranked second after Tesla of the United States.