Hyundai and SK On to jointly build EV battery factory in US
SEOUL -- South Korea's Hyundai auto group and SK on, the battery-making wing of SK Group, will jointly build an electric vehicle battery factory in the United States in an effort to meet requirements of the U.S. Inflation Reduction Act that took effect in March 2023 to only provide subsidies for carmakers which produce U.S.-made electric vehicles installed with batteries made on American soil.
Currently, Hyundai produces the electrified version of GV70, the luxury sport utility vehicle (SUV) model of Hyundai's premium sub-brand Genesis, at a factory in Alabama but the carmaker uses batteries made by SK on, which assembles battery cells made in China into a final battery product at a factory located in South Korea.
The Inflation Reduction Act only allows EVs manufactured in the U.S. and carmakers must use car parts and components, especially large-capacity batteries, which are made in factories located in America in order to have consumers receive tax credits of up to $75,000 when they buy clean energy vehicles.
Through an executive board meeting on April 25, Hyundai auto group said that the company has decided to join hands with SK on to invest a total of 6.5 trillion won ($4.8 billion) to build an EV battery factory with an annual production capacity of 35 gigawatt-hours, which is equivalent to some battery units for 300,000 EVs, in Bartow County, Georgia, by the second half of 2025. The two companies will each hold 50 percent of the shares.
According to the carmaker group, the location of the EV battery factory was strategically set to become an ideal spot for supplying Kia's Georgia factory (189 kilometers away), Hyundai's Alabama factory (304 kilometers), and the auto group's first dedicated EV plant that will also be built in Georgia State (460 kilometers) by 2025.
"Through the construction of the joint venture factory, we will strengthen partnership with SK on and stabilize local battery supply to increase EV sales," a Hyundai official said in a statement on April 25.
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