Hyundai, LG Energy to Build $4.3b EV Battery Plant in Georgia

Electric Vehicles provide quiet, clean and efficient means of transporting people and goods.

Source : Eren Goldman, Contractor News

June 5, 2023

Author : Alex Bustillos

The US is working in full throttle to embrace clean energy and replace all kinds of fossil fuels. With increasing gas costs and attention to sustainability, the EV market in the US is booming. The electric vehicle market in the United States is expected to grow at a 25.4% CAGR from $28.24 billion in 2021 to $137.43 billion in 2028. In 2023, EV sales are estimated to hit 1.9 million units. 

Hyundai-KIA is the second EV car manufacturer after Tesla. 

Hyundai and LG Energy Solution will collaborate to create a $4.3 billion electric car battery plant in Bryan County, Savannah, Georgia, which is expected to create 3,000 jobs. This new plant will be adjacent to the site of the Hyundai EV "Meta Plant," which is currently under construction. 

Both companies signed a joint venture memorandum to produce electric vehicle (EV) batteries in the United States, and together they hope to accelerate the group's electrification efforts in North America. The agreement was signed at LG Energy Solutions headquarters in Seoul on May 26th, in the presence of Youngsoo Kwon, CEO of LG Energy Solution, and Jaehoon Chang, President and CEO of Hyundai Motor Company. 

This partnership marks a significant milestone towards a more sustainable future and positively impacts the industry. 

Chang, in a statement, stated that the battery plant has the potential to "create a strong foundation to lead the global EV transition." He further stated, " Hyundai Motor Group is focusing on its electrification efforts to secure a leadership position in the global auto industry."

"Two strong leaders in the auto and battery Industries have joined hands, and together we are ready to drive the EV transition in America," said Kwon. The CEO of LG Energy Solution further added, "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."

$4.3b will be invested in the project, where each company will hold a 50% stake in the joint venture. 

The JV plans to begin construction on the project in the second half of 2023 and produce batteries by the end of 2025. The yearly production capacity of the plant will be 30GWh and will have the potential to support 300,000 EVs. Hyundai believes its annual capacity will increase to 500,000 EV productions later. Hyundai Mobis will assemble these cells into battery packs and supply them to Hyundai production units for KIA and Genesis EV models.

Hyundai and LG Energy Solution had worked together in the EV battery sector since 2009 when Hyundai unveiled its Elantra Hybrid EV. LG Energy Solution provided batteries for Hyundai Elantra and later contributed batteries to Kona Electric and IONIQ 6 EVs. 

Additionally, this is not the companies' first collaboration. Both companies began constructing an Indonesian battery cell manufacturing plant in Karawang in September 2021. The $1.1 billion project is scheduled to begin operating in the first part of 2024. 

According to the US inflation reduction Act, to qualify for a $7,500 EV tax credit, EVs must be built in North America, and a specific portion of their battery components and minerals must originate in North America or a US free trade partner.

Hyundai's EVs, including Kia and Genesis EV models, do not qualify for the tax credits as they don't meet the domestic manufacturing requirements.

Democratic US Senator Jon Ossoff of Georgia Ossoff said, "The IRA's manufacturing incentives continue to bring jobs and investment to Georgia." He added, "My goal remains to make Georgia the world leader in advanced energy production."

Category : Green Economy Investment in Infrastructure Market Watch

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