Even the big Koreans in the court of Joe Biden. The green law with 370 billion dollars in tax credits, the Inflation reduction act (IRA), which has already acted as a magnet for Volkswagen, BMW and Stellantis, has also convinced Hyundai and Samsung Sdi, a subsidiary of the giant Samsung Electronics. The announcements came at the same time as Yoon Suk Yeol’s mission to the US. The South Korean president flew to Washington to meet President Joe Biden during the first state visit to the United States by a South Korean leader in 12 years. To accompany Yoon the top executives of some of the largest companies in South Korea, including the executive chairman of Hyundai Motor Group, now the third global force, Euisun Chung.
Samsung Sdi aims to double its activities in the US with a battery plant for electric vehicles with a capacity of 30 GWh per year in a yet undefined location, through a joint venture with General Motors and an investment of over 3 billion dollars. Production of nickel-rich prismatic and cylindrical cells to be supplied to GM for its future electric vehicles will begin by 2026. The one with GM will be Samsung SDI’s second battery plant in the United States, in addition to investments of $ 2.5 billion for the joint venture with Stellantis, with the Indiana plant starting operations in the first quarter of 2025.
The joint venture will give the first American house the possibility of achieving its objectives on supplies, as well as on cost competitiveness. “The cells we build together will help us scale our EV capacity in North America to well beyond 1 million units annually,” said GM CEO Mary Barra. Just today, GM released its first-quarter results, with adjusted earnings per share exceeding expectations ($2.21 versus $1.72). The Detroit automaker raised estimates for earnings and cash flow for the full year 2023, even as costs for key raw materials such as steel remain problematic. The stock lost 3 percent.
Hyundai has set up a $5 billion electric vehicle battery joint venture with another Korean firm, SK On, a unit of SK Innovation, in the United States, its largest market. The plant will be built in Georgia. Hyundai also reported that its first-quarter net income more than doubled, exceeding expectations. On the Stock Exchange, the stock rose up to 5% to a seven-month high after the announcements. Hyundai announced two weeks ago a plan of 18 billion dollars of investments by 2030 for the electrification of the group.
The double made-in-Korea move follows new standards for the procurement of critical raw materials and minerals on electric vehicles for sale in the United States. Models who meet the criteria are eligible for tax credits of up to $7,500 just under the IRA. Cars manufactured by Hyundai and its subsidiary Kia are currently ineligible for the credits, currently enjoyed only by the big Americans (GM, Ford and Tesla) and, for one model, (ID.4) Volkswagen.