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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Jisun] Ahead of President-elect Donald Trump’s inauguration, which could see the repeal of U.S. electric vehicle (EV) subsidies, South Korean battery manufacturers with significant U.S. investments are facing uncertainty, according to a report by Bloomberg on December 8.
Citing sources, Bloomberg reported that South Korean battery companies are delaying or temporarily halting construction of manufacturing plants in anticipation of potential policy changes under Trump’s second administration. POSCO Future M recently disclosed that the completion timeline for its joint venture cathode material plant with General Motors in Canada has been postponed. EcoPro Materials CEO Kim Byung-hoon commented, “We are closely monitoring Trump’s remarks on EVs. The Inflation Reduction Act (IRA) has been a critical factor for us, and if policies change, our strategies may need to be adjusted.”
Trump's transition team is reportedly considering the repeal of the IRA’s EV tax credits, which offer up to $7,500 per vehicle. South Korean companies have significantly increased their North American investments in response to the IRA. The three major battery manufacturers (Samsung SDI, LG Energy Solution, and SK On) have announced plans to build 15 plants in the U.S., with half of these plans emerging after the IRA took effect in 2022. According to Bloomberg, the total planned U.S. capital expenditure by Korean battery firms amounts to $54 billion (approximately 77 trillion KRW).
South Korean companies have also contributed to job creation in North America, generating over 20,000 jobs through foreign direct investment (FDI) last year—more than any other country. However, with sluggish EV demand persisting, the battery industry remains heavily reliant on subsidies from the Biden administration. LG Energy Solution and SK On have received $1 trillion KRW and $211 billion KRW in subsidies, respectively, while Samsung SDI’s joint venture with Stellantis recently secured a $7.5 billion loan from the Biden administration.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
