US-based Production Allies
Hyundai Motor Company, Kia Corp., and Hyundai Mobis approved a proposal to establish a North American joint battery cell venture with SK On in a regular board meeting. This formalizes the establishment of a joint venture following the signing of a business agreement between Hyundai Motor Group and SK On last November to cooperate on battery supply in North America. SK On will also hold a board meeting on April 27th to decide on the joint venture with Hyundai Motor Group.
The two companies have been key partners in the electrification business, cooperating to supply batteries for major electric vehicles such as the IONIQ 5, the EV6, and the GV60. “Hyundai Motor Group Chairman Chung Eui-sun and SK Group Chairman Chey Tae-won have joined forces to target the North American EV market,” an industry insider said.
Hyundai Motor Group and SK innovation will build a battery cell factory in Bartow County, Georgia, United States with a targeted start-up date of the second half of 2025. The plant will have an annual production capacity of 35 GWh (gigawatt hours), which is equivalent to about 300,000 electric vehicles. The two companies will jointly invest a total of US$5 billion (approximately KRW6.5 trillion), with each company holding a 50 percent stake. Half of the total investment will be financed through the joint venture’s borrowings.
Batteries produced at the plant will be used to power Hyundai, Kia, and Genesis electric vehicles manufactured by Hyundai Motor in the United States. The joint venture’s location is near Kia’s Georgia plant, Hyundai’s Alabama plant, and Hyundai Motor Group’s dedicated EV plant, which will be completed in 2025 and provide supply chain management advantages. The plan is to expand EV sales by locally sourcing batteries optimized for U.S.-produced vehicles.
Hyundai Motor Group is also in talks with LG Energy Solution over establishing a joint battery plant in the United States. The plant is expected to be on a scale similar to the joint venture with SK On and is expected to formalize the establishment of the joint venture as early as next month. Hyundai Motor Group and LG Energy Solution already invested in a battery joint venture in Indonesia.
Hyundai Motor Group is expected to secure enough batteries to produce at least 600,000 electric vehicles annually in the United States through collaboration with LG Energy Solution and SK On. The Korean automotive group is also expected to benefit from the Advanced Manufacturing Production Credit (AMPC) Program, which subsidizes battery production.
Hyundai Motor Group plans to accelerate its response to the IRA with its alliance with Korean battery makers. To meet the IRA’s requirements for North American-made EVs, Hyundai plans to accelerate the establishment of an EV-only plant in Georgia. It will shorten the construction period from the first half of 2025 to the second half of 2024.
“We expect all of our models to benefit from the IRA beginning in 2026,” said Seo Kang-hyun, head of Hyundai’s planning and finance division, on a conference call.
Hyundai Motor aims to see the proportion of electric vehicle sales in its total U.S. sales reach 58 percent and Kia Corp. 47 percent by 2030. It has a plan to rapidly expand the share of EVs in the United States to reach 3.64 million EVs in global production by 2030. The U.S. government’s push for 67 percent of new vehicles as electric vehicles by 2032 is further accelerating a transition to electric vehicles.