Two companies from South Korea, Hyundai Motor Group and LG Energy Solution, said they will build an electric car battery factory worth 4.3 billion US dollars or more than Rp 64 trillion in the United States.
This is an attempt to take advantage of tax credits under the Inflation Reduction Act or Anti-Inflation Act (IRA) of 7,500 US Dollars or about Rp. 112 million for the purchase of electric vehicles.
However, in order to get a tax credit, a car manufacturer from the Ginseng State must comply with several conditions, one of which is that it must use resources and other important minerals from America for its production.
Currently, electric vehicles made by Hyundai and its sister company, KIA, are not eligible for tax credits under the US Inflation Reduction Act.
Hyundai and LGES said construction of the US electric vehicle battery plant, located in the state of Georgia, will begin in the second half of 2023, with battery production starting in late 2025 at the earliest.
“The plant will have an annual production capacity of 30 gigawatt-hours (GWh), enough for 300,000 EVs,” the two companies said as quoted by Reuters on Friday (26/5).
Hyundai Motor Group, the world’s third-largest automaker by sales, is building an EV and battery manufacturing facility in Bryan County, where the joint plant with LGES will be headquartered.
LGES and Hyundai Motor Group, which is home to Hyundai Motor, KIA and parts maker Hyundai Mobis, will each own 50% of the joint venture. LGES supplies automakers including Tesla Inc and General Motors.
“Two powerful leaders in the automotive and battery industries have joined forces, and together we are poised to drive the EV revolution in America,” LGES CEO Youngsoo Kwon said in a statement.
In April, Hyundai Motor completed a US$5 billion EV battery joint venture in the US with SK On, the battery business unit of SK Innovation Co Ltd, boosting electrification efforts in its largest market.