Hit by IRA Incentives, Hyundai to Build Battery Factory Worth IDR 64 Trillion in US

Bisnis.comJAKARTA – Hyundai Motor Group and LG Energy Solution Ltd (LGES) of South Korea announced their plans to build a battery factory electric car (EV) worth 4.3 billion US Dollars or about Rp.64 trillion in the United States.

Quoted from Reuters on Friday (26/5/2023), this move was taken as part of the two companies’ efforts to take advantage of available tax credits. This is because car manufacturers must meet new US requirements regarding electric vehicle battery components and essential minerals.

As a result, buyers of their vehicles may qualify for a $7,500 tax credit under the Foreclosure Act. Inflation (IRAs).

As is known, until now the cars produced by Hyundai Motor Co and their sister company, Kia Corp, still do not meet these requirements.

Hyundai and LGES announced that construction of the plant will begin in the state of Georgia in the second half of 2023, and battery production is expected to begin in late 2025.

The plant will have an annual production capacity of 30 gigawatt-hours (GWh), which is enough to produce 300,000 EVs.

Hyundai Motor Group, the world’s third-largest automaker, is also currently building facilities manufacturing EVs and batteries in Bryan County, the same state where the joint venture plant with LGES will be located.

LGES, which supplies batteries to automakers including Tesla Inc and General Motors Co, and Hyundai Motor Group will own 50% share each other in partnership.

“Two powerful leaders in the automotive and battery industries have joined forces, and together we are poised to drive the transition to electric vehicles in America,” LGES CEO Youngsoo Kwon said in a statement.

For information, in April 2023 Hyundai Motor also completed a $5 billion joint venture with SK On, which is the battery division of SK Innovation Co Ltd, as a step to increase electrification efforts in its largest market.

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