LG and Hyundai to invest $4.3 billion in US EV battery plant

LG and Hyundai to invest $4.3 billion in US EV battery plant

Korean companies LG and Hyundai have announced a partnership to establish a new electric vehicle (EV) battery cell manufacturing plant in the United States. The joint venture, solidified by a memorandum of understanding, will involve an investment of $4.3 billion, with each company holding a 50 percent stake. Construction of the facility is scheduled to commence in the second half of 2023.

The battery plant will be situated in Savannah, Georgia, where Hyundai is already in the process of constructing its first all-EV factory in the US. The collaborative manufacturing facility is projected to become operational no earlier than 2025. Once operating at full capacity, it will have an annual battery production capacity of 30 gigawatt-hours (GWh), equivalent to supporting the manufacture of 300,000 electric vehicles.

LG and Hyundai are following in the footsteps of several other major companies that have recently invested in US-based battery manufacturing facilities. In 2021, Toyota announced plans to build a battery plant in the US as part of a $3.4 billion investment. Additionally, Ultium Cells, a joint venture between General Motors (GM) and LG, secured a $2.5 billion loan from the Energy Department to construct EV battery facilities. Ford has also joined the trend by allocating $3.5 billion for the construction of a lithium iron phosphate battery plant in Michigan. The utilization of lithium iron phosphate technology can lead to more affordable EVs due to its lower cost and ability to tolerate frequent and rapid charging.

The Biden administration’s commitment to bolstering EV and battery manufacturing within the US is a significant driver for these investments. The American Battery Materials Initiative, launched last year, is providing $2.8 billion in grants to 20 companies to encourage domestic battery production. The aim is to reduce dependence on foreign supply chains, which are often perceived as unreliable.

Both LG and Hyundai believe that their new facility will facilitate the creation of a “stable supply of batteries in the region” while enabling them to swiftly respond to the escalating demand for EVs in the US market. Hyundai Mobis, the automaker’s parts and service division, will assemble battery packs using cells manufactured at the plant. These packs will be utilized in Hyundai, Kia, and Genesis electric vehicles.

The collaboration between LG and Hyundai signifies a significant milestone in the development of the EV industry, as it emphasizes the growing importance of battery production and supply chain capabilities. As the demand for electric vehicles continues to surge, partnerships and investments of this nature will play a vital role in ensuring the availability of reliable and cost-effective EV batteries to meet market needs.

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