Hyundai Motor Group and LG Energy to Build $4.3 Billion Electric Vehicle Battery Plant in US

South Korea’s Hyundai Motor Group and LG Energy Solution Ltd said on Friday they would build a $4.3 billion electric vehicle (EV) battery plant in the United States as part of a drive to profit tax credits.

Manufacturers must meet new U.S. sourcing requirements for electric vehicle battery components and critical minerals so buyers of their vehicles can qualify for a tax credit of up to $7,500 under of the Inflation Reduction Act (IRA).

Vehicles from Hyundai Motor Co and partner automaker Kia Corp are not currently eligible.

Hyundai and LGES said construction of the plant in the state of Georgia will begin in the second half of 2023, with battery production beginning in late 2025 at the earliest.

It will have an annual generating capacity of 30 gigawatt hours (GWh), enough for 300,000 EVs, they said.

Hyundai Motor Group, the world’s third-largest automaker by vehicle sales, is building electric vehicle and battery manufacturing facilities in Bryan County, State, where its joint plant with LGES will be based.

LGES and Hyundai Motor Group, which includes Hyundai Motor, Kia and auto parts maker Hyundai Mobis Co Ltd, will each own 50% of the joint venture.

LGES supplies car manufacturers such as Tesla (TSLA) and General Motors.

“Two strong leaders in the automotive and battery industries have partnered, and together we are poised to drive America’s electric vehicle transition,” LGES CEO Youngsoo Kwon said in a statement.

In April, Hyundai Motor finalized a $5 billion U.S. electric vehicle battery joint venture with SK On, a battery unit of SK Innovation Co Ltd, boosting electrification efforts at its largest market.