Five battery materials plants worth about 5.6 trillion won in total have been announced this year by Chinese companies and local partners in South Korea, including battery firms POSCO Future MThe deals follow the introduction of the U.S.'s Inflation Reduction Act , which requires at least 40% of the value of critical minerals used in an auto battery to be sourced from the United States or a free trade partner to qualify for a $3,750 tax credit per vehicle.
South Korea has a free-trade agreement with the United States that would likely make batteries manufactured in the North Asian nation and later installed in U.S.-manufactured electric cars eligible for the federal tax credits. That hasn't stopped Chinese companies from setting up a series of joint projects with South Korean partners.said last week that Seoul had approved its plan to add 80,000 tonnes in cathode materials production capacity to its South Korea facility that can currently produce 20,000 tonnes a year.