During a six-day trip to the US, South Korean President Yoon Suk Yeol engaged with Tesla CEO Elon Musk today in Washington, D.C. Musk called the meeting to discuss the potential for constructing a Tesla Gigafactory in Korea.
In a summary of the discussion, Yoon stressed that “South Korea possesses elite built robots and a highly skilled workforce, which makes it a perfect place to run a Gigafactory.” Yonhap is a Korean news agency.
Yoon was also cited as stating in full:
“We will actively help Tesla with matters of location, workforce, and taxes should it opt to invest.”
Yoon sent a similar message during their earlier meeting, stating that Korea boasts a world-class automobile sector and that the country would endeavour to simplify rules to make it simpler for foreign investment. We don’t have a record of the conversation, but it seems like he was being more clear here, offering Tesla particular direct support as opposed to broad government regulation action.
According to reports, in response, Musk said that he intends on visiting South Korea in the future and stated that the nation continues to be a top contender for a Gigafactory.
Yoon and Musk virtually met in November to talk about the idea of establishing a new Gigafactory in Korea, which was already on Tesla’s shortlist of potential destinations. At the time, there were rumours that Tesla was thinking about building a Gigafactory in Canada or Mexico.
Since then, Tesla has declared that it will construct a Gigafactory in Mexico, possibly putting the kibosh on rumours of alternative locations. The sales of electric vehicles are expected to experience “explosive growth” globally in the upcoming years, thus it appears to be that Tesla continues to be keen on other regions.
Tesla plans to grow its sales by 50% annually for the coming years, with the conceivable (and wildly unrealistic) objective of delivering 20 million cars by 2030. To get there, though, a lot of facilities will be required.
A relatively quick 500-mile flight across the Yellow Sea separates Shanghai, where Tesla already has one factory, from Korea. But there is definitely a need for an additional factory in East Asia, wherein half of the world’s population resides.
Korea is emerging as a significant player in the EV market. Hyundai and Kia are two of the biggest producers of electric vehicles, while Korean battery companies LG Chem, Samsung SDI, and SK On work with numerous automakers worldwide.
Additionally, China is not a trading partner of the United States, although Korea is. Given the recent Inflation Reduction Act regulations mandating domestic or free trade production of battery parts and essential minerals, respectively, this might be pertinent.
Even though any Korean Gigafactory will largely target Asian markets, it might give Tesla more options for handling or recycling battery materials.
Because these regulations also mandate that vehicles undertake final assembling in North America (as long as you lease them, a position that Korean manufacturers lobbied for), Korea in particular felt belittled by them. It would be only reasonable to respond by letting an American automaker open a factory in Korea since this has led numerous Korean manufacturers to make a commitment to setting up factories in the US.
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