Hyundai Motor Group and SK On officially announced today the signing of a memorandum of understanding (MOU) related to EV battery supply in North America.
The upcoming partnership between the two South Korean companies was rumored at a few days ago and it seems that the report was at least partially confirmed.
Hyundai Motor Group is looking for a lithium-ion battery cell supplier in North America, where the group intends to produce electric cars at three of its plants: Hyundai Motor Alabama Plant (HMMA), Kia Georgia Plant (KaGA), and Hyundai Motor Group Metaplant America (HMGMA) in Georgia.
SK On already supplies batteries for the group's EVs like the Hyundai Ioniq 5, Hyundai Ioniq 6 and Kia EV6 - all produced in South Korea. The company also has two battery plants in Georgia and a few other projects (joint ventures) with various manufacturers (including Ford).
If Hyundai Motor Group and SK On proceed forward, we can probably expect that another SK On joint venture battery gigafactory will be built at the Hyundai Motor Group Metaplant America (HMGMA) in Georgia. The rumor indicates an output of 20 GWh/year, but we guess that it might be significantly more.
Further details on the cooperation will be revealed at a later stage.
Hyundai Motor Group dedicated EV plant in brief:
- name: Hyundai Motor Group Metaplant America (HMGMA) LLC
- location: a 2,923-acre site in Bryan County, Georgia
- investment: $5.54 billion (by the company and its affiliate suppliers)
- EV plant: 300,000 units annually (potentially more)
(multiple models from Hyundai, Kia and Genesis)
- battery plant: a joint venture with an undisclosed yet battery manufacturer
- construction start: early 2023
- commercial production: from H1 2025
- jobs: about 8,100 new jobs
Gallery: Hyundai Motor Group Breaks Ground on Metaplant America Dedicated EV and Battery Plant
An interesting thing is that SK On directly points out the US Inflation Reduction Act (IRA) as a major change and that the partnership is crucial to comply with the new requirements.
"In addition, the cooperation between Hyundai Motor and SK On is anticipated to have a great effect in responding to the US Inflation Reduction Act (IRA).
This means a series of IRA restrictions that lead to production/processing of key minerals for electric vehicle batteries and assembly of electric vehicles can be met through cooperation between the two companies.
To secure lithium, a key material for making EV battery cells, SK On recently signed purchase contracts with resource development companies in countries that have signed FTAs with the U.S. including Australia and Chile, taking quick steps to meet IRA requirements."
Hyundai Motor Group Executive Vice President Kim said:
“Through the EV battery MOU, we will be able to further accelerate our efforts to secure EV leadership in the U.S. market. We expect the stable supply of EV batteries from SK On will also enable us to contribute to emissions reduction and meet climate goals in the U.S. market.”
SK On Chief Administrative Officer Choi Young-chan said:
“We expect the cooperation between SK On and Hyundai Motor Group to create a big synergy. Both sides can hold a solid position in the process of electrification in the North American auto market.”
By 2030, Hyundai Motor Group would like to increase its global sales of all-electric vehicles to 3.23 million annually.