Hyundai Motor Co and LG Energy Solution Ltd reportedly contemplate building a pair of battery plants in the United States to benefit from the Inflation Reduction Act, as per South Korea’s local paper Dailian.
Speculations
The two massive battery plants are reported to be erected in Georgia under the proposal. According to a source cited by Dailian, each will have an annual capacity of roughly 35-gigawatt hours (GWh), which is sufficient to supply about 1 million electric vehicles.
As per the report, the new plants are most likely to be built close to the automaker’s new EV factory in Georgia. Essentially, it would aid the automaker in adhering to the EV subsidy regulations in the US.
However, both South Korean companies failed to comment on the reports to Reuters when the news agency contacted them.
US Inflation Reduction Act’s influence
By 2023, the newly passed Inflation Reduction Act will mandate that at least 40% of the financial value of key minerals for EV batteries originate in the United States. Apart from that, it will only enable US free-trade partners to be eligible for US tax breaks. In 2027, that percentage will increase to 80%.
It is worth noting that Hyundai’s potential investment occurred when the Inflation Reduction Act was unclear. It has encouraged numerous automakers to aggressively position themselves in the US market.
Nonetheless, the IRA’s future is uncertain as several nations have started to oppose the new law, with some even planning reprisal.
