Daily Management Review

South Korea to provide $7 bln to local producers of electric cars batteries


South Korea's Ministry of Trade, Industry, and Energy announced that the nation plans to give local producers of electric car batteries 9.7 trillion won ($7.1 billion) in financial support.

The goal of the move is to lessen reliance on China and establish a new supply chain that will be more compliant with US trade regulations.

The financial assistance, which will come in the form of lower interest government loans and tax breaks, will assist regional battery manufacturers for electric cars in obtaining vital minerals from the US and its trading partners in accordance with free trade agreements. According to the government, the money would also go toward developing lithium-metal batteries and substitutes for graphite, a crucial component of batteries.

The goal of South Korean electric vehicle and battery industries is to conform to the complicated regulations of Washington, which include a more stringent approach towards Chinese suppliers. A section of the regulations addresses the withholding of tax credits from the United States for automakers that procure essential components from China.

source: bloomberg.com