South Korea’s Hyundai Motor Co. said it had finalised a $5 billion electric vehicle (EV) battery joint venture in the U.S., boosting electrification efforts in its largest market. Hyundai also reported its first-quarter net profit had more than doubled, exceeding expectations. Its shares rose as much as 5% to a seven-month high after the announcements, and as the automaker also initiated steps to improve shareholder returns.
Hyundai and partner SK On, a battery unit of SK Innovation Co Ltd, will set up a new battery manufacturing plant in the state of Georgia, the companies said, formalising an earlier provisional agreement.
The move follows new U.S. sourcing requirements for EV battery components and critical minerals in order for car buyers to qualify for up to $7,500 in credits under the Biden administration’s Inflation Reduction Act (IRA). Cars made by Hyundai and sister company Kia Corp are currently not eligible for the tax credits.
The announcement was made as South Korean President Yoon Suk Yeol is in Washington to meet President Joe Biden on the first state visit to the U.S. by a South Korean leader in 12 years. Accompanying Yoon on the trip are top executives of some of South Korea’s biggest companies, including Hyundai Motor Group Executive Chair Euisun Chung.
Rivals General Motors Co (GM.N) and Samsung SDI said they would invest over $3 billion to build a joint venture EV battery manufacturing plant in the United States.
The Hyundai-SK On Georgia plant is expected to start manufacturing battery cells in the second half of 2025 with an annual production capacity of 35 GWh, sufficient to support the production of 300,000 EVs.