SEOUL -- Hyundai Motor has finalized a $5 billion electric vehicle battery joint venture in the U.S., boosting electrification efforts in its largest market.
Hyundai also reported on Tuesday that its first-quarter net profit had more than doubled.
Hyundai and partner SK On, a battery unit of SK Innovation, will set up a new battery manufacturing plant in the state of Georgia, the companies said, formalizing 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 are currently not eligible for the tax credits.
The joint venture “further accelerates the group’s electrification efforts and bolsters its position as an EV leader in the U.S. market with a stable battery supply,” Hyundai said. The automaker signed a memorandum of understanding with SK On to secure battery supply for North America last November.
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 gigawatt hours, sufficient to support the production of 300,000 EVs.
Affiliate Hyundai Mobis will assemble battery packs using cells from the planned plant, then supply them to Hyundai Group’s U.S. manufacturing facilities for the production of models including the Ioniq 5, the Kia EV6 and the Genesis GV60.