This plant would not be the first such facility Hyundai has constructed in the U.S. Over the summer, the automaker funded a new plant in Georgia to the tune of $5.5 billion. In comparison, the new deal between the automaker and SK On is only $1.9 billion.
SK On is a relatively new battery manufacturing initiative from SK Innovation, headed by CEO Jee Dong-seob. Earlier this year, the company promised it would be the number one resource for EV needs by 2030. The new plant is the latest in their efforts to expand production across the globe. The battery maker has arranged similar contracts with other large automakers. In 2021, U.S. automaker Ford announced an $11.4 billion deal with SK On to construct facilities in Tennessee and Kentucky.
With this move, Hyundai has joined the many automakers looking to source their own EV batteries, either through joint ventures or franchise-owned factories. Owning the means of production promises lower manufacturing costs for corporations and protection from supply chain constraints.
Lithium batteries remain one of the trickiest components for EV automakers to obtain. While the cost has decreased substantially since 2010, supply chain issues and economic uncertainty prevented automakers from a full EV commitment. In recent years, however, it seems that sentiment has finally shifted in favor of zero-emission cars thanks to more budget friendly batteries and technological innovations making them more efficient. This has caused the once disillusioned auto industry to scramble to meet anticipated consumer demand. This deal is only the latest in a flurry of contracts between companies hoping to remain competitive in the changing auto market.
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