On 4 September, US Immigration and Customs Enforcement (ICE), along with multiple other law enforcement organisations, raided Hyundai Motor and LG Energy Solution’s electric vehicle (EV) battery cell plant in Ellabell, Georgia, US.
Hyundai and LG ES each have a 50% stake in the US$4.3 billion HL-GA Battery Company.
HL-GA is part of the larger Hyundai Motor Group Metaplant America (HMGMA) campus. The campus cost US$7.6 billion and has over 16 million square feet of factory floor space.
HMGMA began producing the Hyundai Ioniq 5 in October 2024. The Associated Press noted it as “the largest economic development project the state has ever seen.”
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The Savannah Morning News reported that HMGMA had plans to hire 8,100 people by 2031 and according to Politico, 17 suppliers in the surrounding area announced factories to support HMGMA, representing an estimated additional investment of US$2.7 billion and an additional 7,000 jobs.
These large-scale investments also spurred on upgrades to surrounding infrastructure from the Georgia Department of Transportation.
Earlier this year, Hyundai said it would invest an additional US$5 billion in the US overall.
The abrupt pause to the factory’s operations, caused by the raid, could prove problematic for the battery energy storage system (BESS) industry as well as the EV industry.
A market expert source, speaking with ESN Premium on condition of anonymity, says:
“It’s fair to say that in the short term, the US relies on foreign expertise to develop its battery industry, even if it might not be a long-term trend. The US has many innovative companies working on alternative technologies and lithium-ion (Li-ion) chemistries. However, on the Li-ion front, US companies that have tried to enter this market have struggled to compete.”
ICE raids HMGMA
A reported 500 agents from ICE, Homeland Security Investigations, Georgia State Patrol, the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Drug Enforcement Agency (DEA), and the Internal Revenue Service (IRS) raided the factory.
475 individuals were detained during this raid, of whom approximately 300 were South Korean nationals.
The workers were held in an ICE detention centre in Folkston, Georgia. Treatment of the workers by the officers at the time of arrest and while detained has led South Korea’s Foreign Ministry to investigate claims of human rights violations.
Speaking with the Associated Press, Immigration attorney Charles Kuck said two of his clients were working under a visa waiver programme for tourism and business, which neither had violated.
It is alleged that some detained workers illegally crossed the US border, while others had entered legally but had expired visas or visa waivers that prevented them from working. However, some of those detained were employed by contractors and subcontractors at the construction site, and not by Hyundai or LG ES directly.
On 10 September, The Guardian reported that one of the detained Korean workers had a valid working visa, which had not been violated, but was “mandated” to agree to be removed from the US.
Kuck noted that it is illegal to detain a valid visa holder in this manner.
ICE also claimed that all 475 individuals were either working illegally or in violation of their visas, which has also not been proven to be true.
Recent statements have attempted to highlight the alleged mistreatment of employees at the factory as a motivation for ICE’s investigation. To be clear, ICE does not investigate issues of unsafe working conditions, unless it now fulfils the duties of OSHA.
This raid raises many questions. The source says, “Obviously, this was a pretty big incident, and as a result, it’s unclear just what these South Korean entities are going to do next. It’s unclear how significant the response will be, both politically and diplomatically, as well as from a commercial perspective.”
South Korean battery factories
South Korean battery manufacturers currently produce 45% of all Li-ion batteries sold in the US. The country’s stationary storage market is expected to require around 50GWh of batteries this year, with projected growth to 200GWh by 2028.
In recent months, multiple South Korean companies have outfitted factories made for EV cell manufacturing for the production of BESS cells.
The source explains, “A big trend we are observing is that South Korean battery manufacturers, who have partnered with US entities to produce electric vehicle batteries, are now beginning to repurpose some of their existing facilities, whether operational or nearly finished, to avoid sunk costs.”
“Despite a potential decline in EV demand, these factories are about 90% complete, so manufacturers are shifting some capacity to stationary storage applications.”
In July, another joint venture from LG ES, Ultium Cells, which sees LG partnered with General Motors, announced plans to upgrade its battery cell plant in Spring Hill, Tennessee, to increase production of lithium iron phosphate (LFP) cells.
The upgrade is based on a US$2.3 billion investment initially announced in 2021. Ultium indicated that the conversion of battery cell lines at Spring Hill to manufacture LFP cells will begin later this year, with commercial production expected by late 2027.
Spring Hill was established to double Ultium’s production of nickel manganese cobalt (NMC) battery cells for vehicles like the Cadillac LYRIQ.
LG ES stated that its newly opened LFP production lines are expected to reach an annual capacity of 17GWh by the end of 2025, as previously announced. They also plan to increase this capacity to over 30GWh by the end of the following year, according to a July earnings call presentation.
The company also expects continued energy storage growth and a continued slowing in the EV market, citing increased renewable energy deployment and AI data centre demand as key drivers.
The Korean battery manufacturer also noted that new foreign entity of concern (FEOC) restrictions limiting Chinese equipment in US energy storage projects eligible for tax credits will likely benefit non-Chinese competitors, such as itself.
LG ES does not break out separate financials for its EV and energy storage divisions, but has been balancing production capacity between both segments.
Also in July, South Korean companies SK On and L&F agreed on a memorandum of understanding (MOU) regarding the supply of LFP cathode materials for the North American market.
SK On states that its partnership with L&F, a prominent battery materials producer in South Korea, aims to address the rising demand for LFP batteries in the US. The company also seeks to strengthen its position in the ESS market.
In September, at the RE+ trade show in Las Vegas, US, South Korean battery and electronics materials manufacturer Samsung SDI debuted its new Battery Box (SBB) 1.7 and SBB 2.0 BESS products, which are scheduled to begin US-based production next year.
The anonymous source says of this trend, “About a month ago, the story was that importing batteries from China, which supplies most of the world’s lithium-ion batteries and those for grid applications, was far more advanced in technology but complicated by tariffs and foreign entity of concern (FEOC) restrictions. While it was still possible to make it work, it was much more difficult.”
The source continues, “Domestic batteries produced by South Korean companies were a better option, as they posed no FEOC issues. Since these batteries are made in the US, they are somewhat more expensive, but they might qualify for tax credits under the advanced manufacturing tax credit program. There are no tariffs on the finished batteries, only on inputs like graphite or lithium imported from China. This strategy offered a significant solution.”
South Korean companies can step in to make a profit while assisting US companies in creating projects that are eligible for investment tax credits, but this arrangement does not work if factories have to be paused because their workers are detained.
Further issues arise if the skilled workers needed for these positions are afraid to return to them.
As reported by the Savannah Morning News, Trip Tollison, president and CEO of the Savannah Economic Development Authority, said, “The frustration, and I feel it too, is that there’s no other entity in the world that has this proprietary technology that has to be installed by certain individuals. We are relying on South Korea.”
Jose Munoz, president and CEO of Hyundai Motor Company, told CBS News, “This is going to give us minimum two to three months delay, because now all these people want to get back. Then you need to see how can you fill those positions. And for the most part, those people are not in the US.”
Speaking with Energy-Storage.news, a representative from LG ES stated that there are no plans to delay this factory.
A series of questions was provided to the representative, who responded with LG ES’s official statement on the matter:
“As we have been aiming to start production at HL-GA Battery Company next year, we will commit efforts to minimise the impact on our business. Following the recent agreement at the US-Korea working group meeting that B-1 and ESTA holders can perform installation, inspection, and maintenance of equipment at the US factories, we have resumed essential personnel’s business trips to the US this week (Beginning 13 October).”
“We prioritise the safety of our employees and those of our partners among all others, and we will implement systematic management and support to ensure that all business travellers can focus on their work with peace of mind. At the same time, we will commit our best efforts to normalise the construction and operation of our US facilities, with the aim to ensure a safe business travel environment and uphold our customers’ trust.”
The extent to which operations have been impacted at the factory is unclear. Getting workers back to the factory is still a developing issue.
The anonymous source adds, “If you have these South Korean factories delayed out three years, you could be looking at only 30GWh of available capacity to meet demand, creating a gap of 70%. If there is a one year delay, the gap still goes from about 25% to 40% so even with a small delay of about a year, there’s much less capacity available, which could mean that prices go up.”
“This could mean that projects are delayed, and with the US grid needing more and more storage, that’s where the big problem arises.”
Updates so far
In the weeks following the raid, Hyundai announced it would move forward with expansion plans at the Ellabell plant, and updated its original plans, which would see 300,000 EVs being produced at HMGMA per year, to 500,000 EVs being produced per year.
The US appears to have at least attempted to smooth things over with Hyundai and LG ES as quickly as possible, although it is still unclear whether the detained employees will be compensated in some way for their reported treatment.
The New York Times reported that Chosun Ilbo, South Korea’s “conservative daily newspaper and traditionally an advocate of a strong alliance with the United States, argued that its government must ‘recognise the seriousness of the situation.’ In an editorial, the newspaper urged officials to convey to the United States that the South Korean public is now questioning whether it should continue investing in America.”
Following the raid, Donald Trump wrote on his Truth Social media site:
“Following the Immigration Enforcement Operation on the Hyundai Battery Plant in Georgia, I am hereby calling on all Foreign Companies investing in the United States to please respect our Nation’s Immigration Laws.”
“Your Investments are welcome, and 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 so. What we ask in return is that you hire and train American Workers. Together, we will all work hard to make our Nation not only productive, but closer in unity than ever before. Thank you for your attention to this matter!”
In July, South Korea already found itself in an unfavourable position. The US agreed to reduce tariffs on South Korean exports from 15% to 25% in return for Korean companies pledging US$350 billion in investments in the US, with US$150 billion specifically allocated to boost America’s shipbuilding industry.
On 27 October, Trump did say he was opposed to the raid, further stating on C-SPAN, “When they come in, some of these factories make very, very complex, very highly sophisticated equipment. They’ve got to bring people in with them for a period of time.”
“They’ll teach our people how to do it. But even for a fairly long period of time, they’ll need expertise to be successful. I’m letting people know right now, when they come into our country, we can expect to see them bring in with them some very talented people who have been doing it for many years.”
No one is claiming responsibility for any wrongdoing or mistake within the US or South Korean government. All either entity can appear to agree on is that the raid was unfortunate.
It would become increasingly unfortunate for BESS supply if South Korean companies are expected to invest in the US continuously and are unable to send South Korean citizens to train US employees for fear of being raided by ICE, again.
According to industry sources, about 200 individuals detained during the weeklong ordeal are planning to sue ICE, accusing the organisation of racial discrimination, human rights abuses, and excessive force during their arrest and detention. They are pursuing compensation for damages.