Automotive battery manufacturers must meet strict criteria regarding raw materials sourcing in order for US customers to qualify for electric vehicle tax credits. Kia Motors Corporation and Hyundai Motor Company, which are part of the Hyundai Motor Group, do not yet meet these requirements, so the construction of the plant is intended to provide them with this attractive advantage. At the same time, it will create 3,000 jobs, with a production capacity of 30 gigawatt-hours at about 300 thousand e-at, bringing the number of vehicles produced to half a million units. In addition to the new plant, Hyundai has already entered into cooperation with SK On, which will also start production in 2025.

Theft compensation

Hyundai and Kia also agreed to a $200 million settlement in a class action lawsuit over widespread theft of their vehicles, compensating some 9 million owners in the US. This amount represents damages, insurance deductibles and other theft-related expenses. In response to the increased number of thefts of their products, Korean automakers have announced software updates to more than 8.3 million U.S. vehicles to avoid similar situations in the future. Hyundai's growth prospects have been pleasant in recent years thanks to its stable business strategy and its jump on the electric car trend, with its successful strides especially evident since the beginning of this year.

Hyundai Motor Company's stock performance over the past five years (Source: Google) *

LG and Stellantis

In the case of the plant development with Hyundai, this is the seventh battery plant in operation or under construction in the Americas for LG Energy Solution. The most problematic of these is currently the Ontario plant, as Stellantis, with whom they are partnering on the build, has suspended production due to unmet Canada requirements. The Ontario Minister of Industry claims that Stellantis has been given sufficient financial assistance for construction. Progress on construction plans has been affected by the United States Inflation Reduction Act (IRA) offering various green technology incentives to companies. Ontario Premier Doug Ford will eventually provide additional funding to the company, moving this impasse to a successful resolution to preserve new jobs and improve the quality of life in the region. Federal Industry Minister Francois-Philippe Champagne was thrilled with the announcement and he and LG Energy Solution president share a vision for the future of electric batteries.

LG Corporation's stock performance over the past five years (Source: Google) *

Greenpeace wants to accelerate decarbonisation

Environmental organisation Greenpeace has called on Toyota and Volkswagen to reduce their steel consumption to reduce the size of their models, as the switch to e-cars means emissions are more likely to come from materials. Greenpeace says the carmakers have not taken enough concrete action despite commitments to reduce their carbon footprint from steel processing. Toyota Motor Corp, Volkswagen AG and Hyundai Motor Group were among the biggest steel consumers in 2021, according to Greenpeace, mainly due to high SUV sales volumes. This announcement by Greenpeace calls for automakers to prioritize decarbonization of steel supply and reduce their overall steel consumption.

Olivia Lacenova, principal analyst at Wonderinterest Trading Ltd.

* Past performance is no guarantee of future results