South Korean companies are reconsidering investments in building electric vehicle (EV) battery plants in the United States, according to Bloomberg. [emphasis, links added]
According to Bloomberg, some South Korean companies have slowed or halted the construction of some U.S. battery factories due to concerns about slowing demand for electric vehicles and President-elect Donald Trump's upcoming return to the White House.
Trump's proposed tax credit cuts would benefit electric vehicle manufacturers, leading some South Korean companies to reconsider their $54 billion U.S. investment plans.
According to Bloomberg, the price of lithium, the main mineral used in electric vehicle batteries, has fallen nearly 90% from a high in 2022 due to slower than expected adoption of electric vehicles.
Following President Joe Biden's Inflation Reduction Act, which was signed into law in August 2022, several South Korean companies announced plans to build battery factories in the United States in 2022, pledging to create thousands of jobs, according to Bloomberg .
Global research and analysis firm Aranca said South Korea's supply of batteries and battery materials has grown exponentially over the past few years.
South Korean gigafactories will account for 43% of U.S. battery production growth over the next five yearsaccording to benchmark sources.
In recent years, several Korean companies have poured billions of dollars into U.S. manufacturing, and by 2023, Korean companies will invest more in the United States than any other country.
Trump has long criticized electric vehicles and has vowed to repeal the Biden administration's electric vehicle measures in October 2023, calling them “crazy.”
President-elect's transition team is planning Eliminates $7,500 consumer tax credit for electric vehicle purchasesReuters reported last month.
During the campaign, Trump promised to “radically reform” the U.S. auto industry and vowed to make auto loan interest completely tax-free to boost domestic auto production.
According to CBT News, Trump also proposed providing tax breaks for the purchase of American-made cars, emphasizing that this would increase employment opportunities in the domestic auto industry and benefit American automakers.
The president-elect has proposed imposing tariffs on a variety of imported goods, causing some U.S. companies to accelerate the relocation of production out of other countries such as China and Mexico.
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