FAR EAST: SOUTH KOREA REPORT
Korean battery giant SK Innovation announced that it will expand its supply of batteries to Hyundai Motor Group in North America, and the two companies will discuss the construction of a joint venture plant to increase supply after 2025. SK Innovation says it plans to support Hyundai Motor Group’s increased EV production in North America.
In addition to EV production at its existing Alabama plant, Hyundai Motor plans to start operations of a dedicated EV plant in Georgia by 2025. Kia Motors, a group company, will also increase EV production in Georgia, as stable procurement of batteries, a key component of EVs, has become an issue.
SK On, a battery subsidiary of SK Innovation, already supplies batteries for Hyundai Motor’s mainstay Ioniq EV series. In the U.S., SK On produces batteries at its existing Georgia plant, and after consulting with Hyundai Motor, the company will decide whether to expand the plant or establish a new joint venture plant.
SK, a latecomer in the automotive battery field, has been losing money due to heavy upfront investment, and will promote the construction of a joint venture plant that can share the investment burden with the car giant. With Ford Motor Company, SK is building two joint plants in the U.S. and one in Turkey.
The three major Korean battery companies, SK, LG Energy Solutions, and Samsung SDI have announced a series of battery plant construction projects in North America. The U.S. government has indicated a policy of allocating subsidies and tax credits for EVs produced in North America. The U.S. government is planning to provide tax credits for EVs produced in North America, and if the batteries are not produced in North America, the tax credit will be reduced, and the car giants are encouraging battery manufacturers to expand production in North America.
Source: The Nikkei
PSR Analysis: SK and Hyundai are accelerating their battery strategies in the North American market in order to take advantage of tax credits under the U.S. Inflation Control Act. The development of a production system in North America, a large market, will contribute significantly to the densification of the component supply chain, and will also reduce transportation and other costs. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
