- South Korea is a battery powerhouse and it's made massive investments in U.S. facilities to support many different automakers.
- Those investments are unlikely to simply disappear in a new Trump administration, experts say.
- By ramping up U.S. battery and EV operations early, the Korean firms may have an edge here—and be in a good position to help the U.S. stay ahead of China.
Over the past four years, the U.S. has had a president who has aggressively supported clean energy investments and pushed for an electric transformation of the auto industry. In two months' time, the White House will be occupied by someone who's been openly critical of electric vehicles and has threatened to repeal the tax incentives and subsidies backing them.
So what happens to all the car companies, battery makers and supporting firms who have planned huge investments in American manufacturing? That's now the $300 billion question facing the entire industry. And if tax incentives may not exist to encourage EV purchases, those plans could face tremendous headwinds in the coming years.
But for the Korean automakers and battery manufacturers, the answer so far seems to be this: We've come too far to back off now.
That's the gist of this post-election report from Korea's JoonAng Daily, which certainly concedes that firms like Hyundai Motor Group, Samsung SDI, SK On and LG Energy Solutions are in an "uneasy holding pattern" ahead of President Donald Trump's return to the White House. Trump has vowed to end what he's falsely called a Biden administration "mandate" for EVs as well as Inflation Reduction Act (IRA) subsidies, including possibly EV tax credits and incentives for manufacturing.
But the Korean firms have already made big plans for the U.S., and in many ways, they're significantly further along than most—and they hail from a country that's a key American ally and one of its best opportunities to get ahead of China's battery dominance. While the U.S. may be concerned about China's incursion into the autos space and rise in the world, South Korea is basically next door to the country and has countless reasons not to back down here.
“SK On is bent on expanding U.S. investment regardless of the election results to jump on the bandwagon to contain China, though uncertainties are looming over the downsizing of the Inflation Reduction Act [IRA] in Trump’s second term,” the newspaper reported an SK On vice president as saying during a recent earnings call. “The entire repeal of the law is less likely to happen as some lawmakers in states considered Republican strongholds have recently voiced opposition to the IRA's abolishment... the impact on SK On could be limited.”
According to that story, LG has a similar take:
LG Energy Solution, Korea’s largest battery maker, also said it will push forward with the necessary investment in North America considering various anticipated circumstances such as the scheduled launch of new EVs by client automakers.
“With the IRA requiring a strict process and political consensus, the AMPC benefits will be maintained in a broad framework,” said Kang Chang-beom, a chief strategy officer at LG Energy Solution. “The policy package aimed at containing China will surely be tightened no matter who wins, and LG’s position in the U.S. battery market will have to be solidified."
Since Trump's definitive win last week, few automakers have stepped up to publicly announce what this massive shift in policy could mean for their EV plans—many of which have already been delayed or even canceled amid sales that are rising but out of sync with once-rosy projections. One of the only ones to weigh in so far has been a Toyota Motor North America executive who called California's especially aggressive EV targets "impossible" to meet. While it's not immediately clear if that statement was directly tied to Trump's ascension, it does represent the questions that are being asked more openly now.
But that's just one automaker. And one that's admittedly skeptical about EVs and slower to get more of them to market. It's a very different story with the Hyundai Motor Group and the various Korean battery firms that have been developing that technology for decades and also have a vested interest in not letting China get ahead.
Given that the Trump administration is hardly expected to be cozy with China, that's going to be a big part of the calculus ahead, according to Don Southerton, a longtime business consultant who has worked with various Korean firms.
"Based on what we know, President-elect Trump’s leadership will intensify Washington’s anti-China trade policies, so Korean battery firms must prepare to diversify and internalize their supply chains," Southerton told InsideEVs. "If Trump blocks Chinese companies’ entry into the U.S. and loosens the regulations on autonomous driving, I see Korean battery firms benefiting."
After all, those are the ones who have already bet big on the U.S. As JoonAng Daily noted, South Korea was the top international investor in America in 2023, with "large-scale projects totaling $21.5 billion last year alone." LG, Samsung and SK On are building battery plants across the U.S. to supply many automakers, including Ford, Stellantis, General Motors and more—not just Hyundai and Kia.
By the same token, the Korean automakers got in early and may be in a good position to succeed here. Hyundai's new Metaplant, which will produce the 2025 Ioniq 5 and other models soon, is Georgia's largest economic development project ever. And while that's a red state that went solidly for Trump last week, it's bringing too many jobs to be going anywhere—plus, Hyundai has already confirmed it's meant to be a flexible factory, able to produce hybrids as well as EVs. And extended-range EVs could be on the menu there too.
With more U.S. production coming soon, that means cheaper EVs and cheaper batteries as well. Plus, Hyundai's cars will be the first EVs out of the gate with the Tesla-style North American Charging Stanard (NACS) plug from the factory, granting those cars easy access to Tesla's charging network. Even if the EV tax credits vanish, they could be priced and equipped well enough to succeed on their own merits.
Southerton also echoed much of the present thinking across the industry: even if Trump wants to repeal all aspects of the IRA, that may be logistically tough to do. And the new president would probably have every reason in the world to keep jobs and manufacturing going strong—something he campaigned heavily on.
"In reality, this will take considerable work to roll back, with some severe repercussions," Southerton said. "The Department of the Treasury would have to change IRA regulations and guidelines, which would probably result in litigation regarding IRA loans, guarantees, and subsidies. Trump, too, will need support from the Senate to 'scrap' the IRA. And, across America’s 'Battery Belt,' Republican senators have openly supported the laws to boost manufacturing on American home soil and with plants in red states."
Contact the author: patrick.george@insideevs.com
