Hyundai Motor Group and LG Energy Solution said on May 26 they will build a battery factory in the U.S. to supply Hyundai's electric vehicles there, as they are eager to benefit from American subsidies.

Nikkei Asia reports that the South Korean businesses announced that they will invest 5.7 trillion won ($4.3 billion) for the joint venture in Georgia, taking a 50% stake each. The plant will have a production capacity of 30 gigawatt-hours, enough to supply batteries for 300,000 vehicles per year.

Starting construction in the second half of this year, the JV plans to begin battery production at the end of 2025.

The announcement comes a month after Hyundai announced that it would build an EV battery factory with SK On, another South Korean battery maker, in Georgia by investing $5 billion together. Global auto manufacturers including GM and Honda plan to build their own battery factories in the U.S. in cooperation with battery makers, while Stellantis is negotiating with the Canadian government over subsidies for construction of its battery plant in Ontario.

The administration of President Joe Biden has created subsidies to encourage consumers to switch to EVs, on condition that the vehicles and their batteries are produced in North America.