South Korea’s SK On is increasing battery production at its U.S. facilities in response to rising demand from Hyundai and Kia, as the automakers ramp up electric vehicle (EV) manufacturing in the country. According to industry insiders, SK Battery America, the company’s U.S. subsidiary, will dedicate nine of its twelve production lines in Georgia to supplying batteries for Hyundai and Kia EVs starting in March.
The move comes as Hyundai Motor Group intensifies efforts to meet local sourcing requirements for battery components, which impact eligibility for the U.S. federal EV tax credit of up to $7,500. “In the future, 75 per cent of the production lines at the SK On site in Georgia will be dedicated to Hyundai and Kia,” Business Korea quoted an unnamed industry source as saying.
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The extent to which the battery ramp-up is connected to regulatory changes remains unclear. Earlier this year, the U.S. Department of Energy briefly included Hyundai’s Ioniq 5, Ioniq 9, and Genesis GV70 Electrified models on its list of EVs eligible for federal incentives, only to remove them in January, reportedly due to battery sourcing issues. Hyundai has since outlined plans to replace the affected batteries for U.S. models by March to regain eligibility for the tax credits, Business Korea reported.
SK On’s increased production will primarily supply Hyundai Motor Group Metaplant America (HMGMA), the automaker’s U.S. manufacturing hub. Hyundai and Kia have previously sourced some battery supplies from South Korea and Europe for U.S. production. Meanwhile, the production ramp-up is expected to improve SK On’s capacity utilization, which was reportedly at 46 per cent in the third quarter of 2024, according to Business Korea.
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The expansion underscores the accelerating shift toward localized battery manufacturing as automakers navigate evolving regulatory landscapes and strengthen domestic supply chains in the competitive U.S. EV market.