Hyundai pours in billions in US to accelerate shift to EVs

Hyundai Motor Co. on Tuesday announced it has formalised an electric vehicle (EV) battery joint venture worth $5 billion in the US to galvanise its electric ambitions in the country. The Korean company will set up a new battery manufacturing plant in Georgia along with partner SK On, a battery unit of SK Innovation Co Ltd.

While a provisional agreement had already been reached between Hyundai and SK On previously, the formal announcement of the $5 billion joint venture is a firm nudge to just how serious the company is about tapping the ever-increasing US EV market. The move is especially significant because the US had previously announced the Joe Biden administration's Inflation Reduction Act (IRA) which puts in place requirements for EV battery components and critical minerals so that a car buyer can avail tax credits of up to $7,500 when purchasing a new EV.

At present, no Hyundai or Kia EVs come under this tax credit eligibility and in the past, it had led to frictions at a political level too with South Korea's national security adviser raising the issue with his US counterpart last year. Interestingly, the formal announcement about the joint venture from Hyundai was made on the sidelines of South Korean President Yoon Suk Yeol visiting Washington in what is the first visit to the country by a South Korean leader in 12 years. He is being accompanied by top officials of some of the biggest South Korean companies, including Hyundai Motor Group Executive Chair Euisun Chung.

(With inputs from Reuters)

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