A recent report by Bloomberg has highlighted the Hungarian governments’ success in attracting lucrative and high-tech investment to the country from Korean electric battery manufacturers. The financial news portal has analyzed the race for the lucrative and strategic business segment that is crucial for Europe’s green transition.
As the news portal reported, technology giants such as LG Energy Solution Ltd., Samsung SDI Co. and SK On Co. were among the this week’s InterBattery conference in Seoul, where no less than eight US states “delivered presentations on the benefits they can offer Korean firms as a base for new manufacturing plants, including low corporate tax, talented engineers, integrated logistics and supply chains, and cash incentives”.
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The state of Kentucky, for instance, has attracted part of Ford Motor Co.’s $11 billion investment in new battery plants with SK On. Bloomberg points out that President Joe Biden’s climate bill is pushing US carmakers to find reliable battery suppliers outside China to ensure their vehicles qualify for subsidies, and Europe is following suit.
In Bloomberg’s view, in the EU, Hungary is leading the pack in luring business from Korea, which has plowed 8.2 billion euros into Hungary between 2014 and 2022, making it one of the nation’s largest foreign investors. Samsung and SK On have battery plants in the country that supply automakers such as Volkswagen and BMW.
They have quoted Martina Almasi, director at the Hungarian Investment Promotion Agency, who informed that the country has “a very competitive tax system, very good logistics to serve European markets and excellent education”. Hungary’s corporate tax rate is just 9%, compared to around 25% in Korea.
Apart from a host of US investors, representatives of Australia and the Netherlands have also been spotted at the conference, who will likely present these Korean electric manufacturers with their own proposals.
Despite it being a crucial technology for green transportation, it was not always plain sailing for electric battery manufacturers in Hungary. Recently an opposition linked campaign has challenged a 7 billion euro investment by the Chinese car battery manufacturer CATL in the Hungarian city of Debrecen, quoting environmental concerns. However, the government in Budapest itself has set extra-strict environmental conditions for the planned manufacturing facility, thus CATL’s construction works are likely to start as planned, securing some 9000 jobs for the local economy.
Via Bloomberg, Heejin Kim and Heesu Lee; Featured Photo: Facebook SK Innovation Hungary