The act continues the $7,500 federal Electric Vehicle tax credit, but to qualify for the full amount, it stipulates that EVs and their battery packs must be assembled in North America, and certain minerals used in batteries must be sourced either domestically or from countries with a free trade agreement with the U.S.
Hyundai and SK On have signed a memorandum of understanding for battery supply to Hyundai’s U.S. factories after 2025, with further details to be disclosed at a later date, SK On said in a press release. That will help address the domestic assembly portion of the requirements. SK On is the new name for the battery business spun off of SK Innovation in October of last year.
For the minerals sourcing component, SK said it recently signed lithium purchase contracts with suppliers in countries that have free trade agreements with the U.S., including Australia and Chile.
This confirms earlier reports that the electric vehicle tax credit rules and materials sourcing requirements might accelerate Hyundai’s timeline for U.S.-built EVs.
Hyundai announced its U.S. electric vehicle plant—with a corresponding battery venture—earlier this year. The $5.5 billion plant will be located near Savannah, Georgia, and will target a manufacturing capacity of 300,000 vehicles per year. In October, Hyundai confirmed that Kia electric vehicles will also be made at the Georgia “Metaplant.” Electric vehicles for the automaker’s Genesis luxury brand will be made there as well.
SK already supplies batteries for electric vehicles based on Hyundai’s E-GMP platform, including the Hyundai Ioniq 5 and Ioniq 6 and the Kia EV6.
The IRA’s battery-sourcing requirements have been met with criticism from the auto industry and some members of Congress. A bill seeks the delay of electric vehicle tax credit American sourcing rules, but it appears to be stalled.