Hyundai and SK On to build battery plant in Georgia
Hyundai Motor Group and SK On are following up on their MoU regarding cell supply for Hyundai electric cars made in the USA. The carmaker now announced constructing a joint battery plant with SK On in Georgia, a state that has been scoring e-mobility contracts lately.
Hyundai and SK On have selected a site in Bartow County, which is 45 miles north of Atlanta and 65 miles south of Chattanooga, Tennessee (where Volkswagen is building electric cars). Production will start in 2025, and the partners have yet to disclose planned capacities.
But there are pointers. Hyundai reportedly plans to build up to three new battery factories with SK On and LG Energy Solution. Earlier reports suggest a total annual capacity of 90 GWh for the three planned factories. There has been no specific mention in today’s statement, yet it is likely, that the new joint plant is one of those.
Hyundai has not disclosed which electric vehicles it will use the cells for but is of course planning to build EVs at scale in Georgia. Construction for the so-called Metaplant went underway in October in Bryan County. From early 2025, up to 300,000 Hyundai, Kia and Genesis electric cars shall roll off the lines there, so the current schedule with SK On fits right in.
Whether the US plans will involve local production of the familiar SK cells or new cell chemistry for Hyundai is unknown. Hyundai already uses batteries from SK On in the Hyundai Ioniq 5 and Ioniq 6, as well as in the Kia EV6; all three utilise the E-GMP platform but are primarily being made in South Korea.
Georgia on their mind
This makes them imported goods and therefore, Hyundai’s localisation of production in the USA has been politically charged: the government of South Korea and some EU countries disagree with the new US subsidy for electric vehicles, specifically the US value-added requirements for eligibility.
Since Hyundai currently builds its E-GMP models, such as the Ioniq 5 or the Ioniq 6, only in South Korea, buyers of these vehicles would be left empty-handed in the US. At the same time, some of Hyundai’s upcoming electric models are mainly targeted at the US market and likely be made in Georgia, including the Hyundai Ioniq 7 and Kia EV9 large SUVs. If these vehicles were not eligible for the $7,500 tax credit, it would be a significant competitive disadvantage.
According to Reuters, US President Joe Biden had expressed his willingness in October to “continue discussions with South Korea on the recent US legislation”.
While the administration has to manage the fall-out of the IRA, others reap the fruits. Georgia, governed by Republican Brian Kemp, has managed to score several investments correlated with Biden’s infrastructure funding and Inflation Reduction Act, adding local incentives. Apart from Hyundai and SK On, Freyr and newcomers Rivian and Archer are among other companies opting to build up manufacturing in the state.
Commenting on today’s news, Director of Korean Investment Yoonie Kim at the Georgia Department of Economic Development (GDEcD) said that “by supporting cooperation and partnerships across our growing EV ecosystem, we’re creating a fully integrated supply chain for automotive OEMs while also connecting battery manufacturers with recyclers to close the loop on battery manufacturing”.
Excluding this announcement, EV-related projects announced in the state since 2020 total approximately $17 billion in investment and more than 22,800 new jobs in Georgia, so the statement.
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