Hyundai Motor Group, LG Energy Solution to unveil U.S. plant details in May

LG Energy Solution Ltd.’s joint plant with General Motors Co. in Tennessee [Photo provided by Ultium Cells]

South Korean auto giant Hyundai Motor Group and battery maker LG Energy Solution Ltd. will finalize their plan to establish a U.S. battery joint venture this month.

Hyundai Motor Group is gearing up to cope with the realignment in global supply chains under the U.S. Inflation Reduction Act (IRA) through this effort, in addition to its announcement earlier to set up a joint plant with another battery maker SK on Co. to secure annual supply of batteries for 300,000 electric vehicles in Georgia.

According to multiple sources from the industry on Monday, LG Energy Solution will hold a board meeting on May 26 to decide its investment in a U.S. battery venture with Hyundai Motor Group. Units of the auto group will make a decision at their board meetings on May 25-26.

The new plant will be built near Hyundai Motor Group’s Metaplant America, which is building the auto giant’s EV factory in Georgia. Its production capacity is known to be 30 gigawatt hours and around 5 trillion won ($3.8 billion) to 6 trillion won will be invested. It will be ready to start operations in the second half of 2025. Insiders expect the two companies will increase capacity going forward.

Battery cells to be produced at the venture plant will be mostly supplied to Metaplant America, where EVs for Hyundai Motor Co., Kia Corp. and Genesis models will be produced. The industry sees that nearly all batteries produced at the joint plants built with LG Energy Solution and SK on will be supplied to Metaplant America, with a portion of the supply going to the group’s existing U.S. plants in Alabama and Georgia.

The joint venture with LG Energy Solution in the U.S. is aimed at gaining tax grants under the IRA, which provides a subsidy of $7,500 if an EV is assembled in North America with at least 40 percent of core minerals for batteries mined and processed in the U.S. or by its free trade partners. Genesis GV70, which is being produced by Hyundai Motor in the U.S., did not meet the requirements and was excluded from the subsidies.

The partnership between Hyundai Motor Group and LG Energy Solution dates back to 2021, when the two companies began establishing a 10 GWh joint battery cell plant in Karawang, Indonesia. Their joint venture in the U.S. is likely to give a boost to the partnership as they will be equipped with a solid cooperative platform to target the global EV market.

LG Energy Solution currently supplies pouch-type batteries to Hyundai Motor’s Kona EV and Ioniq 6. Once the latest U.S. venture with the auto giant is established, the company will have eight production bases in the North American region. The battery maker is currently operating a plant in Michigan and its first joint plant with General Motors Co. in Ohio. Two more factories will be built with GM in Tennessee and Michigan.