South Korea has announced a $5.32 billion financial support package aimed at helping the country’s battery makers invest in infrastructure in North America over the next five years.
The initiative is intended to help South Korean firms capitalize on the United States’ Inflation Reduction Act, which requires automakers to source 50% of critical EV battery resources from the U.S. or a U.S. free-trade partner to qualify for new federal incentives.
South Korea’s package will provide support through lowering lending rates, and insurance premiums cut by up to 20% and additional loans and tax credits for firms seeking to build battery and materials production facilities in North America.
The South Korean government will work on the initiative with the country’s biggest battery cell makers and materials firms.
The new U.S. legislation has sparked some concern among auto manufacturers, particularly given that China dominates the global supply of many key raw materials used to make EV batteries.
South Korea has been particularly affected, with two-thirds of its cathode, anode and electrolyte materials sourced from China. However, several automakers are already reacting to the new requirements with new investment plans.