BAW looks to build EV plant in Korea’s Goyang City

[Photo provided by Goyang City]

South Korea’s Goyang City, Gyeonggi Province, and China’s Beijing Automobile Works Co. (BAW) said on Wednesday that they signed a business agreement for the Chinese automaker to build a large-scale electric vehicle factory in the city’s free economic zone.

BAW plans to build an EV production and sales facility of approximately 2 million square meters in the prospective Goyang Free Economic Zone. The investment amount is estimated at 4 trillion won ($3.01 billion), with an annual production target of over 200,000 units, around 90 percent of which is planned for export.

The company also plans to engage in research and development (R&D) operations as well as talent development via vocational training, and job placement for trainees, while also building welfare facilities for its workers.

Chinese battery materials companies have been increasingly investing in Korea to circumvent the U.S. Inflation Reduction Act (IRA), and the move appears to be expanding into the automotive sector.

Founded in 1958, BAW is a Chinese state-owned automobile manufacturing and sales company that exports cars to 48 countries. It ranked 12th in global EV production and 6th in China in 2023.

BAW currently does not sell cars in Korea but has reportedly explored entry opportunities for several years thanks to Korea‘s free trade agreement (FTA) network with the United States and its stable automobile production capabilities.

Goyang City will dispatch a working-level team to BAW’s headquarters in China in April 2024 for further discussions on the agreement’s details. However, there is a prerequisite that Goyang City must be selected as a free economic zone for the investment to materialize.