A growing number of US states are going all-out to attract lucrative production lines of Korean battery makers, with some of them offering hefty incentives in addition to the federal government’s tax cuts under the Inflation Reduction Act.

“There’s a national competition among some states. It really comes down to the whole package of what a state can offer,” Indiana’s Secretary of Commerce Brad Chambers told The Korea Herald in a recent phone interview.

Indiana has already been announced as the host of a $2.5 billion battery plant, a joint venture between Samsung SDI and Stellantis, in the city of Kokomo. With production set to start in 2025, the high-profile partnership is expected to create some 1,400 new jobs in the state.

As part of its ongoing efforts to create an electric vehicle ecosystem, Indiana recently committed to offering up to $3 million worth of incentives for Jaewon Industrial, a South Korean battery materials manufacturing company and a key supplier to Samsung SDI, to set up its first US plant in Kokomo as part of a $102 million investment plan.

Of the $3 million funding, $2 million will be given to the company as incentive-based tax credits once the plant hires more than 100 employees. Two of the grants worth $500,000 each will be offered for workforce training and research and development.

“The company’s plant is strategically located in proximity with Samsung SDI and Stellantis’ gigafactory, such that it cuts down carbon emissions from vehicle transport. It’s so close to the Samsung facility that they can use a pipeline to transport battery materials,” Chambers stressed.

As a top-tier company for recycling n-methyl pyrrolidone, or NMP, a type of solvent used in the battery manufacturing process, Jaewon Industrial also aims to recycle up to 100,000 tons of NMP once at full capacity.

“We’re excited to have the company here in Indiana after the conversations we had during my last visit to Seoul,” Chambers said, adding that Samsung SDI, which has closely worked with Jaewon Industrial in global operations, is highly likely to have suggested Indiana for its local production base.

Korean battery makers are investing heavily in North America to secure a footing in the burgeoning EV market there. But recently they are facing fresh pressure as United Auto Workers, a labor union representing some 150,000 workers at General Motors, Ford and Stellantis, are demanding wage hikes alongside claims that fast-paced electrification within the automotive industry is putting their jobs in jeopardy.

“I wouldn’t suggest that there’s an overarching challenge,” Chambers said in response to concerns about potential cost burdens for Korean battery makers. “Like any other businesses, the companies will be having conversations with the labor, other suppliers and local municipalities and states.”

He also expressed keen interest in hosting a $3 billion joint venture between Samsung SDI and GM in Indiana, hinting at heated competition among states. With plans to be operational by 2026, the two companies have not yet decided on a location.

Indiana plans to ramp up efforts to support the business expansion of Korean battery makers and other companies by launching a liaison office in Seoul by late summer.