South Korean automaker Hyundai and tech giant LGES have just announced plans to co-develop an electric vehicle battery cell factory in the US.
The two major players in the electric vehicle industry officially inked a memorandum of understanding for the joint venture, which occurred in LGES’ Seoul headquarters on May 26. Hyundai Motor Company President & CEO Jaehoon Chang and LGES CEO Youngsoo Kwon were both present at the ceremony.
About the joint venture
The press release noted that Hyundai Motor Group and LGES would each control a 50% share in the joint venture, totaling more than USD 4.3 billion (KRW 5.7 trillion) investment.
The partners expect the new battery factory to have an annual production rate of 30 GWh, which is enough to power 300,000 EVs per year.
The location of the factory is in Bryan County, Savannah, Georgia, near Hyundai Motor Group Metaplant America, which is currently under development.
As for the schedule, the JV aims to begin construction in H2 2023, while battery production is set by late 2025 at the earliest.
Benefits
The new JV between Hyundai and LGES will undoubtedly aid the former’s strategy to dominate the global auto industry. Most especially, it will enable the automaker’s EV to qualify for the federal tax credit of up to $7,500, which requires specific strict battery requirements.
“Hyundai Motor Group is focusing on its electrification efforts to secure a leadership position in the global auto industry. We will create a strong foundation to lead the global EV transition through establishing a new EV battery cell plant with LG Energy Solution, a leading global battery producer and long-time partner.”
Hyundai Motor Company President & CEO Jaehoon Chang
On the other hand, LGES now has seven battery installations in the US that are either operational or under construction with this newly formed JV. It is worth noting that the company is currently consolidating the majority of its resources in the country to boost its production capacity. Through this, LGES aims to deliver cutting-edge products quickly and in large quantities, hastening the US’ transition to sustainable energy.
“Two strong leaders in the auto and battery industries have joined hands, and together we are ready to drive the EV transition in America. By further advancing our product competitiveness and global operational expertise, LG Energy Solution will commit our best efforts to offering the ultimate sustainable energy solutions to our customers.”
LGES CEO Youngsoo Kwon
It is worth noting that these two South Korean companies already have a long-standing partnership in the EV industry. Hyundai asserted that it had already collaborated with LGES on various projects, including the Elantra Hybrid, Kona Electric, and IONIQ 6 dedicated EV. Apart from that, they also have another JV for an Indonesian battery factory, which is set to begin production in H1 2024.
See Also:
- Hyundai and LG are speculated to partner in constructing two massive battery plants
- Honda, and LG announced US joint venture to build 4.4 billion EV Battery Plant
- 6 EV-makers disqualified from tax credit of up to $7,500 due to new battery sourcing requirements
- US and Japan partner on EV battery minerals to lessen reliance on China
- The IRA significantly boosts the EV supply chain in the US
As for the upcoming US battery factory, the JV aims to begin construction in the second half of 2023. Meanwhile, battery cell production is set to begin by late 2025 at the earliest.
