According to the industry ministry, South Korea will provide domestic battery manufacturers with a financial support of 7 trillion won, or $5.31 billion, over the course of the next five years to assist them in responding to the Inflation Reduction Act (IRA) of the United States and improve their competitiveness in the sector. To encourage battery companies to invest in facilities in North America, the government will, among other things, extend the financing at lower rates and lower insurance premiums.
The IRA calls for surrendering to $7,500 in tax breaks to EV purchasers whose vehicles are collected in North America, as per the Service of Exchange, Industry and Energy, reports Yonhap news organization. It likewise requires EV batteries to be made with a specific extent of minerals mined or handled in the US or on the other hand nations or districts that have international alliances with Washington.
The IRA has accelerated global business conditions in the battery industry, necessitating collaboration between the public and private sectors to find solutions. During a meeting with concerned institutions and battery companies, Industry Minister Lee Chang-yang stated that the government will fully support battery manufacturers in their continued success on the global market.
In addition, South Korea intends to push for new lithium iron phosphate battery development projects to assist businesses in entering a new market. Businesses investing in battery materials and related fields will be targeted for greater tax incentives. According to the ministry, South Korea will try to set up a “mother factory,” or hub, for cutting-edge technology development, research, production, and other core functions at home. LG Energy Solution, Samsung SDI, and SK On, the country’s three major battery manufacturers, have pledged new investments totaling 1.6 trillion won over the next five years.
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