In reaction to the protectionist Inflation Reduction Act, South Korean battery and automakers are investing significant sums of money to establish joint ventures for electric vehicle batteries in the US, according sources.
Samsung SDI revealed plans to establish a US joint venture with General Motors. The location of the transaction and its specifics were kept confidential.
With a $3 billion investment, the plant will be able to produce 30 gigawatt-hours of batteries annually, enough to power almost 200,000 electric vehicles. Production is scheduled to begin in 2026.
The production plant will create cylindrical lithium-ion batteries measuring 46 millimetres in width and 80 millimetres in length for Samsung that will be used in GM electric vehicles.
GM, who had primarily installed pouch-shaped batteries, would expand its EV battery portfolio with Samsung's batteries, according to sources.
Through the joint venture Ultium Cells, which has three battery manufacturing facilities in Ohio, Tennessee, and Michigan, GM had maintained close business links with LG Energy Solution, a competitor of Samsung.
Previously, GM was in negotiations with LG to construct its fourth plant, but as the talks broke down, the company decided to go with Samsung.
The planned facility with GM will be at the vanguard of its developing footprint in the US, the third-largest EV market in the world, following its initial joint venture with Stellantis in Indiana.
“We will make our best efforts to support GM in cementing its EV leadership with high quality and stable battery products,” said Samsung SDI CEO Choi Yoon-ho in a statement.
Additionally, the Hyundai Motor Group announced its intention to invest $5 billion in Georgia, the US, to create a joint venture with the Korean battery manufacturer SK On. Each of the two will own 50% of the company's shares.