outh Korea’s Hyundai Motor and local battery makers are struggling with the US’s climate and energy law that’s aimed at containing the influence of Chinese companies in the global electric car industry and boosting domestic production of EVs.
Hyundai and Kia have become the largest EV makers after Tesla in the US this year, selling about 44,000 units, according to BNEF. Korean battery makers are supplying not only US carmakers like Tesla, GM, Ford and Rivian, but also European names such as Volkswagen and BMW. Korean government and company officials don’t see the exclusion of Chinese rivals as an opportunity since the two nations rely heavily on each other. It’s not a new dilemma either — the US is South Korea’s closest political ally but China is its biggest trading partner and deeply involved in Korean supply chains.
South Korea’s Industry Minister Lee Chang-yang earlier this week said he was considering filing a complaint with the World Trade Organization against the act. About 25 lawmakers in South Korea proposed a resolution against it, urging the US not to “discriminate” against foreign electric car and battery makers.
Another issue is that Hyundai will have to reduce its dependence on Chinese-made car parts. South Korea imported about 35% of its total parts from China in 2021, according to the Korea Institute for Industrial Economics and Trade.