Hyundai Motor to Invest in SK On's U.S. Battery Plant
Hyundai Motor Co. has selected SK On as its battery partner in the United States. The two companies are in eleventh-hour talks over Hyundai Motor's equity investment in SK On's battery plant to be built in the state of Georgia with an annual production capacity of 40GWh.
The new plant is expected to cost about 3 trillion won. Batteries of 40GWh can power 500,000 electric vehicles (EVs) with a mileage of more than 500 km on a single charge.
"SK On wants to build a joint venture plant with Hyundai Motor, but Hyundai Motor wants to lower its stake in the plant as much as possible,” an industry insider said. “But even if SK On builds the plant on its own, it will still supply batteries to Hyundai Motor.” SK On is expected to suffer a loss of more than 1 trillion won in 2022.
SK On’s batteries are slated to go into the IONIQ 7 and the EV9, which will be produced at Hyundai Motor’s planned EV plant in Georgia. At this plant, Hyundai Motor and Kia will produce models that share a dedicated platform (E-GMP). SK On’s Georgia Plant 3 will go live in 2025 and supply batteries for EVs.
SK On is expected to secure a regular buyer through Hyundai Motor's investment in its battery plant. Its first plant in Georgia (9.8 GWh per year) has been operating since the first quarter of 2022, and the second plant (11.7 GWh per year) is scheduled to start rolling out products in the first quarter of 2023. SK On also plans to build and operate a fourth plant in Georgia through partnership with automakers. "SK On plans to build five or six factories depending on the situation," an industry analyst said.
The moves of the two companies are a response to the “Made in America” policy of the Joe Biden administration, which decided on May 3 (local time) to provide a total of US$3.16 billion (about 4 trillion won) in subsidies to new battery factories in the United States.
In the first quarter of 2021, Hyundai and Kia sold a combined total of 15,414 EVs in the United States, ranking second. Although there was a huge difference of more than 100,000 units with No. 1 Tesla (113,382 units), the two Korean automakers had their presence felt, analysts say.