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Korean companies LG and Hyundai are teaming up to build a new EV battery cell manufacturing plant in the US and have signed a memorandum of understanding to invest $4.3 billion in the project. The companies will each hold a stake of 50 percent in the joint venture, which will start construction on the new plant in the second half of 2023. Their new manufacturing facility will be located in Savannah, Georgia, where Hyundai is also building its first all-EV factory in the US. The battery plant is expected to be operational by 2025 at the earliest. After it starts production at full capacity, it will be able to produce 30GHWh of battery every year, which is enough to support the production of 300,000 electric vehicles.
LG and Hyundai are just the latest companies to invest in US-based battery manufacturing facilities over the past couple of years. Toyota announced in 2021 that it will build a battery plant in the country as part of a $3.4 billion investment, while Ultium Cells (GM's and LG's joint venture) secured a $2.5 billion loan from the Energy Department for the construction of EV battery facilities. More recently, Ford announced that it's spending $3.5 billion to build a lithium iron phosphate battery plant in Michigan. Lithium iron phosphate, which can tolerate more frequent and faster charging, costs less than other battery technologies and could bring down the cost of EVs.
Other companies could follow suit, seeing as the Biden administration is pushing to bring more EV and battery manufacturing to the US. Last year, it launched the American Battery Materials Initiative, which will give 20 companies $2.8 billion in grants in hopes of encouraging manufacturers to start battery production stateside and making sure that the US won't be heavily dependent on “unreliable foreign supply chains.”
Hyundai and LG believe that the new facility can help create “a stable supply of batteries in the region” and allow them “to respond fast to the soaring EV demand in the US market.” Hyundai Mobis, the automaker's parts and service division, will be assembling battery packs using cells manufactured in the plant. The automaker will then use those packs for Hyundai, Kia and Genesis electric vehicles.