WASHINGTON — South Korea Hyundai The motor company said on Friday that it will begin operations this month with $5.5 billion electric car and battery plant in the USA.

Hyundai plans to start commercial production in the first half of 2025 with an annual capacity of 300,000 units. Hyundai Group said the Oct. 25 groundbreaking of the Hyundai Group “meta-factory” in Savannah, Georgia, is part of “Hyundai Group’s commitment to allocate $10 billion by 2025 to the development of mobility in the US, including the production of electric vehicles.”

The new development comes amid anger from Korea and the European Union over US tax policies on electric vehicles.

The anti-inflation law, signed by Biden in August, requires electric vehicles to be assembled in North America to qualify for tax breaks in the United States, but excludes Hyundai and its affiliate Kia Corp from EV subsidies since they don’t yet make cars there like the big European automakers.

By law, about 70% of electric vehicles are immediately ineligible for tax credits of up to $7,500 per vehicle.

Earlier this month, South Korea said Biden expressed a willingness to continue negotiations with South Korea over recent US legislation that denies subsidies to most foreign electric vehicle (EV) manufacturers.

Biden has also repeatedly praised investments by major foreign automakers in building electric vehicle and battery factories in the United States, including Tuesday’s announcement Honda Motor and LG Energy that they will locate a $4.4 billion battery plant in Ohio.

Biden gave the assurances in a letter to South Korean President Yoon Suk-yeol, who last month asked the US president for help to allay Seoul’s fears that new US rules would hurt South Korean automakers, Reuters reported.

As a result of the August law, only about 20 electric vehicles can receive subsidies under the new rules, among them models with Ford Motor Co and BMW.

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