South Korea’s biggest conglomerates are rushing to contain fallout from a sweeping U.S. immigration raid at a Hyundai Motor Co.-LG Energy Solution Ltd. battery venture in Georgia, a move that threatens to disrupt the electric vehicle supply chain and put billions of dollars in planned investments at risk.

LG Energy Solution has tentatively decided to postpone the start of its EV battery plant with Hyundai in Georgia, the Korea Economic Daily reported on September 8, without saying where it got the information. Hyundai has banned all U.S. trips by its staff, the newspaper said.

LG Energy had initially planned to begin production later this year, with the goal of churning out batteries totaling 30 GWh annually, but decided to push that back to the first half of next year, the publication said, saying it would likely affect production plans for Hyundai and its affiliate Kia Corp. 

An LG Energy spokesperson said on September 8 that the company had already delayed the start of production to next year, instead of this year, due to market conditions, adding that it's too early to say whether the immigration raid will affect the plant’s operations. A Hyundai Motor and Kia spokesperson, when asked about the news report, said it is too soon to determine any impact on its business.

Even before the raid, some companies were growing cautious. In May, Samsung Electronics Co. issued internal guidelines on U.S. business travel under the short-term ESTA visa, telling employees trips should not exceed two weeks, a company spokesperson said.

Investor reaction was muted, with LG Energy and Hyundai Motor shares only slightly lagging the broader market. Analysts said potential delays at LG Energy had been well flagged, while Hyundai has flexibility to adjust EV output and tap other suppliers. LG Energy was little changed, while Hyundai slipped about 1% on the morning of September 8.

The raid is emerging as a major diplomatic flashpoint as it came less than two weeks after President Lee Jae Myung met with U.S. counterpart Donald Trump, where the two leaders showcased their alliance and solidified a new trade pact that includes a $350 billion fund to support South Korean firms expanding in the U.S.

The high-profile immigration enforcement operation — the largest single-site action in the history of the Homeland Security Department’s investigative arm — also risks deterring South Korean businesses’ private expansion plans. The nation’s corporations recently pledged $150 billion in direct U.S. investment in an effort to boost trade ties between the nations.

Foreign Minister Cho Hyun departed for Washington on September 8 to secure the release of 300 South Korean citizens swept up in the raid. 

Meanwhile, Trump urged businesses to respect U.S. immigration laws.

“We encourage you to LEGALLY bring your very smart people, with great technical talent, to build World Class products, and we will make it quickly and legally possible for you to do,” he said in a Truth Social post.

The Georgia facility is a cornerstone of the U.S. effort to secure domestic EV supply chains. Beyond its diplomatic importance, the delay adds fresh risk for automakers counting on battery deliveries to meet production targets.

Mass-producing the EV batteries from 2026 has become impossible due to the exit of key talent during the installation and trial production period, Yuanta Securities analyst Anna Lee said in a report. She expects a delay of at least a year due to the diplomatic solutions required in the absence of other visa options for workers.

Still, the impact on earnings would be limited because LG Energy has already warned of possible delays in the production, she said.