Hyundai Motor Group has signed a deal with LG Energy Solution to source battery cells for its new $5.5bn electric vehicle (EV) production hub in Georgia. The joint venture, valued at $4.3bn, will see both companies holding a 50% stake in a new battery plant to be constructed in Bryan County. The plant will have an annual capacity of 30 gigawatt hours of batteries, enough to power 300,000 EVs annually. Construction will begin this year, with production scheduled to start in late 2025. The LG deal follows a similar agreement that Hyundai signed with South Korean battery supplier SK On Co. for a $5bn battery plant in Bartow County, Georgia.
Diversifying suppliers for a key component like vehicle batteries is about creating redundancy and obtaining batteries with different form factors and chemistries. “Having choices means OEMs can design and market EVs with differing performance levels, range and price,” said Conrad Layson, senior analyst at AutoForecast Solutions. “Most importantly, diversifying the battery supplier base relieves the OEMs from being dependent on issues at any one battery supplier.”
The new Hyundai assembly plant, located outside Savannah, will build six electric models and is expected to open by early 2025. The 2,800-acre project will have an initial production capacity of 300,000 EVs. However, that total could rise to 500,000, based on demand. The passage of the Inflation Reduction Act, which incentivised North American EV and battery manufacturing, has opened the investment floodgates. Since the law passed in August, automakers and suppliers have announced more than $11bn in EV battery investments.
Hyundai has pledged $16bn globally through 2030 for EVs and aims to sell 3.23 million battery-powered vehicles globally by then. Hyundai and Kia delivered around 119,000 EVs during the first quarter of 2023, down 2.2% from a year ago, according to SNE Research, a Seoul-based research firm.