Dive Brief:
- Hyundai Motor Group and Posco Group signed a memorandum of understanding to shore up the automaker’s domestic sources for steel and battery materials, Posco said in an April 28 press release.
- Under the agreement, Posco will make an undisclosed equity investment in Hyundai’s planned $5.8 billion steel plant in Louisiana, which will help the company gain market access to the North America steel market.
- The arrangement aims to give Posco a more flexible global production and sales system to ensure steady supply of materials to the U.S. and Mexico, per the release.
Dive Insight:
The collaboration between Hyundai and Posco coincides with efforts by automakers to boost domestic production to mitigate tariffs on vehicles, auto parts, and steel and aluminum made outside the U.S.
The two companies have been discussing a partnership since last year as part of Posco Chairman In-hwa Chang's end-to-end localization strategy in "high-growth, high-profit steel markets," per the release.
“Based on the synergy between the two companies, we will be able to find solutions for sustainable growth across the group’s businesses, including steel and secondary battery materials, amid global trade pressures and paradigm shifts,” Ju-tae Lee, president of Posco Holdings, said in a statement.
Construction of the Louisiana steel mill is projected to start in 2026. The plant, which is expected to create more than 5,000 jobs, will produce 2.7 million metric tons of steel annually when production starts in 2029, according to a press release from Hyundai Steel.
Besides bolstering domestic steel and essential battery materials supply, the collaboration aims to help Hyundai achieve its goal to sell 3.26 million EVs annually by 2030, according to a statement from Hyundai.
Posco subsidiary Posco Future M is also collaborating with Honda and General Motors to provide battery materials.
