Hyundai Motor has reportedly tied up with battery maker SK On in the US. Before the pair establishes a joint venture, SK On will retool a battery production line dedicated to Ford at its plant in the State of Georgia and manufacture batteries for Hyundai instead.
Citing industry sources, South Korea-based ET News reported that SK On has been repurposing the battery line for Ford at its second factory in Georgia to accommodate Hyundai's needs. The battery company is expected to finish the transition by the end of August and begin volume production as soon as September.
Equipment suppliers of SK On's Georgia site have participated in the retooling. The move will help Hyundai EVs be eligible for the tax credits offered by the Inflation Reduction Act and facilitate the utilization of SK On's factory.
The South Korean battery maker operates two plants in Georgia. The first plant has a production capacity of 9.8GWh and primarily supplies Volkswagen. The second factory, which has a capacity of 11.7GWh, will produce batteries for Hyundai EVs rather than Ford after SK On secures a partnership with the South Korean carmaker.
SK On and Ford have been constructing three battery plants in Tennessee and Kentucky through their joint venture, BlueOval SK. The three plants will have an annual capacity of over 120GWh in total.
The utilization of SK On's plants was affected by Ford's declining EV sales. Moreover, Hyundai needs batteries produced in North America to make its EVs eligible for tax credits. The duo's collaboration will satisfy their respective interests.
The US aims to lure foreign automakers and suppliers to the country with incentives enabled by the IRA. To receive tax credits of up to US$7,500, an EV must finish its final assembly in North America. Hyundai EVs have yet to be eligible for the incentives because its GV70 EVs, produced in the US, are still equipped with batteries SK On made in China.
