Hyundai Announces $1.1 Billion Investment with LG Energy, Building Electric Battery Joint Venture

Hyundai Motor and LG Energy Solution announced a partnership as the company plans to invest 1.43 trillion won or $1.1 billion to build an electric battery joint venture, which will gain competitiveness in the North American automotive market.

Hyundai, LG Energy's Joint EV Battery Factory

In a regulatory filing, Hyundai Motor announced that $1.1 billion investment with LG Energy Solution to build an electric vehicle battery joint venture. According to a report from Reuters, this will be Hyundai's second battery supply sour in North America, which follows the joint factory with another Korean EV battery maker named SK On Co.

The approved plan was announced after their respective board meetings between the two companies. This will invest a total of 4.55 billion over the next six years from both parties, with each holding a 50% stake in an effort to gain competitiveness in the automotive market of North America. Meanwhile, the remaining 2.2 billion will be secured through borrowing.

Hyundai is aiming to sell over 1 million EVs across the country, which accounts for 30% of its global EV sales target of 3.64 million by the end of the decade.

Expected Plans for EV Battery Joint Venture

The factory is expected to be built in Savannah, Georgia with a target to start operations by the end of 2025. Pulse News reported that this will have an annual production capacity of 27 gigawatt-hour that will equip the production of battery cells for about 230,000 electric vehicles in total.

The produced battery cells in the joint factory are planned to be used by Hyundai Mobis to manufacture battery packs and will be supplied to vehicles at Metaplant America. This is Hyundai Motor Group's first electric vehicle factory in the United States.

As per an industry source, "When combined with the battery capacity supplied by LG Energy Solution and SK on, Hyundai Motor Group will have a total capacity of 62 GWh. This is equivalent to the volume needed to power about 580,000 high-performance EVs annually."

Only last month, Just Auto reported that SK and Hyundai Motor Group announced their plans to invest $5 billion to produce 35 GWh of battery annually in Bartow Country, Georgia. This investment plan followed the recent US Government announcement of tax credits worth up to $7,5000 for electric vehicles produced locally by HMG.

Aside from the recent announcement, Hyundai also partnered with LG Energy Solutions to build an electric vehicle battery cell plant in Indonesia to secure leadership in the global battery EV market. According to the company's announcement, the construction began in September 2021.

The plant will be located in Karawang New Industry, near Jakarta, announced during a virtual groundbreaking ceremony with the Government of Indonesia. Participants include President Joko Widodo, Minister of Investment Bahlil Lahadalia, and Maritime and Investment Affairs Coordinating MinisterLuhut Binsar Pandjaitan.