[Herald Interview] Indiana lures Korean businesses with skilled workforce, hefty incentives

IRA-backed US state plans to set up liaison office in Seoul to bolster ties with battery makers

The US state of Indiana is seeking to set up a liaison office in South Korea to reach out to Korean businesses that are investing heavily to expand their presence in the burgeoning electric vehicle market there.

“We are excited about opening a liaison office here that will focus on helping Indiana secure investment from Korea-based companies,” Indiana’s Secretary of Commerce Brad Chambers told The Korea Herald in an interview in Seoul Friday.

“We are actively working to confirm Korean representation, as it is our top priority this year to strengthen international engagement," he said.

The details about the Korean office, including its launch date, have not yet been decided.

The high-level official was visiting Korea to attend InterBattery 2023, the battery industry’s largest annual gathering, as part of a US delegation consisting of representatives from seven states, including those that have production facilities by the nation’s top three battery makers -- LG Energy Solution, Samsung SDI and SK On. The other states that are in the delegation are Ohio, Michigan, Tennessee and Kentucky.

In particular, Indiana’s latest overture to Korean businesses comes as Samsung SDI together with its joint venture partner, Stellantis, plan to build their new $2.5-billion EV battery plant in the Indiana 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.

Chambers stressed Indiana was able to beat out rival states to secure the Samsung SDI-Stellantis plant because of its skilled workforce, abundant industrial infrastructure and other tax benefits.

“We are one of the top states that spend a significant amount of money on workforce development and training,” Chambers said, adding the state’s Battery Innovation Center is at the forefront of creating a robust ecosystem for the electrification of the automotive industry.

Chambers highlighted the state's stable business environment and low-cost operations as another strength, based on more than 100 years of history in advanced manufacturing.

“In terms of the automotive industry in particular, Indiana is home to five original equipment manufacturers: AM General, General Motors, Honda, Subaru and Toyota,” he said.

He agreed that the Inflation Reduction Act has spurred US states to seek to do business with foreign companies, especially Korean battery makers.

“There is a lot of interest by Korean companies in Indiana’s rapidly expanding supply chain, driven by a fast-growing ecosystem for battery technology, automotive and EV manufacturing,” he said.

The IRA offers a $7500 tax credit to American consumers of EVs or fuel cell vehicles assembled in North America, a portion of which will be made available if the batteries include critical materials extracted or processed from the US or countries that have free trade agreements with the US, or are recycled in North America.

Chambers showed especially keen interest in attracting Hyundai Motor Group, the world’s third-largest carmaker, which has not yet secured a manufacturing base for its EVs on American soil.

Because Hyundai Motor’s first EV plant is expected to be completed in Georgia by 2025, the Korean government is asking Washington to implement a grace period until then before the IRA rules take effect.

With the issue highly likely to top the agenda at the upcoming summit between Presidents Yoon Suk Yeol and Joe Biden, Chambers said, “In my opinion, the federal authorities have been listening to Yoon’s request for the US to make modifications to the IRA to be more accommodating to Korean businesses. I am hopeful that the two can find common ground through the meeting.”

Aside from the EV manufacturing sector, Chambers said Indiana’s two other focus areas are the life sciences as well as microelectronic semiconductors, and hinted at forging more business partnerships.

“We are in talks with a number of companies across different industries and excited about the rapidly evolving Korea-Indiana relationship,” he said.

Currently, a total of 12 Korean companies, including Samsung SDI and Posco, are doing business in Indiana.