South Korean car maker Hyundai will invest $398m for a stake in Korea Zinc, a leading non-ferrous metal smelter, to secure its supply of key metals for electric vehicle (EV) battery manufacturing.
The rationale for the partnership lies in developing a ‘nickel value chain’ that would secure, process and recycle necessary metals for EV batteries.
Electric vehicle sales rapidly increased during the pandemic, heightening concerns over China’s preeminence in lithium battery supply chains. The ongoing war in Ukraine has also increased the price of raw materials (cobalt, lithium, and nickel) and exacerbated supply chain issues.
Batteries account for a large part of an EV’s total cost, around 30% to 40% of their value.
The investment forms part of Hyundai’s plan to invest ₩24trn (around US$18bn) in the South Korean EV sector by 2030.
In May, Hyundai announced it would invest $1.51bn in building an electric vehicle factory in Ulsan, South Korea. The factory will be Hyundai’s first domestic plant in 29 years.
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Prior to this, Hyundai finalised a $5bn joint venture with South Korea’s SK Group in North America to construct a new battery manufacturing plant in Georgia, US. The factory is expected to be operational by late 2025 with an annual capacity of 35 GWh of EV battery cells.
Hyundai’s software operations are also ramping up with the motor group stating in June it had reached 10 million global subscribers for its connected car services, up from just 1 million in 2018.