Hyundai Motor Group and South Korea’s Posco have formalized a new partnership to advance the supply of low-carbon steel and essential battery materials, including lithium and active anode materials, in a move designed to strengthen supply chains and secure resources for the electric vehicle (EV) industry.
The memorandum of understanding (MOU) between the two companies focuses on enhancing their collaboration in the U.S. market, particularly through the development of an electric arc furnace (EAF) steel plant in Louisiana. The agreement is expected to eliminate tariff barriers on U.S. steel supplies, with Posco aiming to bolster its position as a leading supplier of both automotive steel and key battery materials for the growing EV sector.
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Posco, based in Pohang, has long been a significant player in steel production but is also expanding its footprint in the EV supply chain. The company is involved in producing lithium hydroxide and active cathode and anode materials critical for electric vehicle batteries. The new partnership with Hyundai also includes Posco’s investment in Hyundai’s EAF steel mill project in Louisiana, which is expected to begin operations in 2029. The steel plant will have an annual production capacity of 2.7 million tons and will supply steel to Hyundai’s U.S. manufacturing plants, including the Hyundai Motor Group Metaplant America in Georgia and Kia’s Autoland facility in Alabama.
“By leveraging the synergy between the two companies, we can find sustainable growth solutions across our entire business portfolio, including steel and secondary battery materials, amid global trade pressure and shifting industry paradigms,” said Lee Joo-tae, President of Posco Holdings.
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In addition to its U.S. expansion, Posco plans to establish a flexible production and sales model by tapping into its existing plant in Mexico, creating a more efficient supply chain across the Americas.
The new partnership builds on the companies’ ongoing collaborations, including shared work on motor cores. Posco’s broader strategy includes expanding its steel portfolio to include materials for EVs, such as its ‘GIGA Steel’ for automotive applications, alongside a growing presence in battery materials and the global lithium market.