Hyundai Motor Group Signs MoU with SK On Co. to Secure Batteries for EVs Built in the U.S.
South Korea-based automaker Hyundai Motor Group is moving one step closer to securing the batteries its needs for future electric vehicles the automaker will build in North America.The automaker announced the signing of a MoU with battery maker SK On Co., Ltd to secure a supply of batteries for EV production in the U.S.
Sk On Co was launched as an independent company of parent SK Innovation in 2021. The company aims to become one of the world's leading producers of electric vehicle batteries.
The battery supply agreement was signed by Heung-soo Kim, Executive Vice President and Head of Corporate Future Growth Planning Division & EV Division of Hyundai Motor Group and Young-chan Choi, Chief Administrative Officer of SK On at SK Group's Headquarters in South Korea.
Under the MoU, both parties will cooperate to provide SK On batteries to the Group's plants in the U.S. after 2025 for electric vehicle production. Further details on the cooperation will be revealed at a later date.
"We expect the cooperation between SK On and Hyundai Motor Group to create a big synergy," SK On Chief Administrative Officer Choi Young-chan said. "Both sides can hold a solid position in the process of electrification in the North American auto market."
The battery supply deal with Sk On in the U.S. is part of the Hyundai Group's plan to establish a global EV production network. It will also help Hyundai meet the requirement of the recently signed Inflation Reduction Act, which will require automakers to source 40% of raw materials for EV batteries from the U.S. or from a U.S. free-trade partner beginning next year in order to qualify for new U.S. EV tax credits of up to $7,500. The EVs would have to be built in the U.S. in order to qualify for the tax credits.
Hyundai will soon build two new electric SUVs for the U.S. market, one under each nameplate. The Hyundai brand will offer the Ioniq 7 SUV while the new EV9 SUV will be sold by Kia.
In May, Hyundai announced it will invest $5.5 billion to establish its first dedicated EV and battery manufacturing facilities in the State of Georgia. The Georgia EV facility will build vehicles for both Hyundai and its Kia brand. Hyundai says its new EV factory in Georgia will help the company lead the transition to electric vehicles in the U.S.
"Through the EV battery MOU, we will be able to further accelerate our efforts to secure EV leadership in the North American market," said Executive Vice President Kim. "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 market."
South Korean automaker Hyundai Motor Group (HMG) is committing billions of dollars to become one of the world's biggest suppliers of electric vehicles. In March, Hyundai unveiled its strategic roadmap to help accelerate its electrification ambitions.
The plans include a previous investment commitment of $79.2 billion through 2030 to boost its annual EV sales to 3.23 million units and take a 10% global EV market share by decade end.
The updated plans include an additional investment of $10 billion in the U.S. by 2025 to accelerate what it calls "innovation and mobility electrification". Hyundai will also make new investments for expanding and upgrading existing manufacturing facilities in Georgia to build more electric vehicles.
The automaker aims to become one of the top three EV manufacturers in the U.S. by 2026, which would make the automaker one of Tesla's biggest rivals in the North American market.
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