South Korea’s Hyundai Motor Group and LG Energy Solution Ltd on Friday said they will build a $4.3 billion electric vehicle (EV) battery plant in the United States amid a push to take advantage of tax credits.
Manufacturers must adhere to new US sourcing requirements for EV battery components and critical minerals so that buyers of their vehicles can qualify for up to $7,500 in tax credits under the Inflation Reduction Act (IRA).
Vehicles from Hyundai Motor Co and sister automaker Kia Corp are currently not eligible.
Hyundai and LGES said construction of the factory in the state of Georgia will begin in the second half of 2023, with battery production starting at the end of 2025 at the earliest.
It will have an annual production capacity of 30 gigawatt-hours (GWh), enough for 300,000 EVs, they said.
Hyundai Motor Group, the world’s third-largest automaker by vehicle sales, is building EV and battery manufacturing facilities in Bryan County in the state, where its joint factory with LGES will be based.
LGES and Hyundai Motor Group, which houses Hyundai Motor, Kia and autoparts maker Hyundai Mobis Co Ltd, will each own 50% of the joint venture.
LGES supplies automakers including Tesla (TSLA) and General Motors.
“Two strong leaders in the auto and battery industries have joined hands, and together we are ready to drive the EV transition in America,” LGES CEO Youngsoo Kwon said in a statement.
In April, Hyundai Motor finalized a $5 billion EV battery joint venture in the United States with SK On, a battery unit of SK Innovation Co Ltd, boosting electrification efforts in its largest market.