Hyundai Mobis to invest $1.3 billion to build EV parts plant in U.S.

Hyundai Mobis' Georgia plant [HYUNDAI MOBIS]

Hyundai Mobis will invest $1.3 billion through 2030 to build an electric vehicle (EV) parts plant in the United States, the company said in a regulatory filing.

The investment will be made by Mobis America, a U.S. subsidiary of Hyundai Mobis, starting in 2023. Hyundai Mobis will offer $280 million in Mobis America for the investment. The company held a board meeting Wednesday to approve the plan.

The investment is a part of the $5.5 billion investment Hyundai Motor Group Executive Chair Euisun Chung promised to U.S. President Joe Biden during his visit to Seoul in May.

The plant will be the auto parts maker's first EV components factory in the United States. It currently runs plants in Georgia, Alabama and Michigan.

The location of the factory has not been announced, but it has been reported that Georgia is a promising candidate as Hyundai Motor also plans to build an EV plant there.

The components and modules produced in the factory will be supplied to Hyundai Motor and Kia EV facilities in the United States.

The investment was decided to "enter the North American market with the cooperation of Hyundai Motor and Kia," Mobis said.

Hyundai Motor plans to build its first EV manufacturing plant in Georgia, with the goal of starting mass production in 2025. But the automaker is expected to advance the schedule due to the U.S. government's recently-passed EV credit law.

Under the terms of the Inflation Reduction Act (IRA), buyers of EVs assembled in the United States are eligible for a $7,500 tax credit for vehicles purchased after Aug. 16, 2021, extending an existing program that offered a $7,500 tax credit for EV purchases regardless of origin.

After Jan. 1, 2023, content requirements for batteries begin to take effect over a number of years. In 2023, 40 percent of critical-mineral value will have to come from the United States or countries that the United States has signed free trade agreements with to qualify for $3,750 of the credit. That number increases 10 percentage points each year until 80 percent in 2027.

Fifty percent of battery-component value will have to come from the United States to qualify for another $3,750 of the tax credit. That number will increase 10 percentage points a year to 100 percent by 2029.

To qualify for the subsidy, a vehicle must be completely free of Chinese-made components from 2024 and free of Chinese critical minerals from 2025.

BY SARAH CHEA [chea.sarah@joongang.co.kr]