SK On, one of the largest EV battery manufacturers from South Korea, signed a memorandum of understanding (MOU) on November 28 with Hyundai Motor Group. The two companies will be producing EV batteries and EVs in Georgia, US, and the partnership is aimed to bolster Hyundai's EV presence in the US market and accelerate its battery electric vehicle (BEV) sales.
SK On, who now runs one battery production plant in the state of Georgia, US, is building a second plant in the state. Hyundai also broke ground on its Metaplant for EV production in Georgia. In addition to that, SK On is building numerous battery production facility in North America, Europe, and Turkey.
Under the MOU, SK On will provide EV batteries produced in the US for Hyundai's EV production in the US, starting from 2025, Hyundai said.
Reuters reported this week that Hyundai is also considering partnering with LG Energy Solution in the US, but the carmaker has not commented on this matter.
The signing of the MOU took place at the SK Group's headquarters in South Korea. Choi Young-chan, SK On's chief administrative officer said, "We expect the cooperation between SK On and Hyundai Motor Group to create a big synergy. Both sides can hold a solid position in the process of electrification in the North American auto market."
In light of the Inflation Reduction Act (IRA), Hyundai's EV models including Ioniq, which have had a significant market share in the US, will not be eligible for EV incentives in the coming years unless the electric cars would be assembled in North America, so the South Korean carmaker is bringing a new wave of Korean suppliers to the US to produce EVs.
Hyundai bringing EV supply chain to Georgia, US
The strategic partnership with SK On came after Hyundai's breaking-ground on its Metaplant in Bryan County, Georgia at the end of October.
Georgia's state government issued two press releases respectively on Nov 7 and Nov 23 that two Hyundai car parts suppliers, Joon Georgia and Hyundai Mobis, are increasing investment in the state to support Hyundai's EV production, in addition to their existing facilities in the US.
Joon, part of Korea's Ajin Industrial Co., is investing US$317 million in the Bulloch County.
"Less than two weeks after the groundbreaking of Hyundai Motor Group's innovative facility, we're already seeing the regional impact it will have," said Georgia governor Brian Kemp in the press release, "Joon Georgia will be the first of many companies drawn to the Peach State to support the Metaplant."
On Nov 23, the Georgia state government announced that Hyundai Mobis is investing $926 million in an EV power electric system plant in the Bryan County that will eventually employ at least 1,500 people.
Once it reaches full production, the 1,200,000-square-foot facility will be able to supply over 900,000 EV power electric systems and 450,000 Integrated charging control units annually to Hyundai's Metaplant in Georgia, production in Alabama, and Kia production in Georgia. Construction is expected to begin as early as January 2023, and production is expected to begin in 2024.
"Hyundai Mobis' investment project in Bryan County reflects an acceleration in the development of the EV supply chain in Georgia's auto industry," said H.S. Oh, VP of Hyundai Mobis's electric powertrain business unit.
Hyundai Mobis has operated a manufacturing facility with almost 1,200 employees in West Point since 2009 as the largest tier-1 supplier to Kia Georgia, a car brand belonging to Hyundai Motor Group. The plant supplies automotive manufacturers with complete cockpit modules, chassis modules, as well as bumper assemblies.