Hyundai Group’s parts subsidiary Hyundai Mobis has announced that it has secured an investment of $940m to establish a new electrification hub in North America, liaising with seven international financial institutions.

Despite challenging market conditions, such as the tightening of major national currencies and rising market interest rates, the company said it has successfully achieved a low-interest, long-term financing (with a maturity of 10 years) driven by the promising growth potential of the global electrification market.

According to GlobalData’s deals database, a credit guarantee from the Korea Trade Insurance Corporation, an export credit agency, further facilitated this.

This is Hyundai Mobis’ first overseas Green Loan. While Hyundai Mobis issued green bonds domestically in 2021 to advance eco-friendly projects, this marks the first occasion they have utilized the Green Loan method for environmentally-friendly business investments abroad. Green Loans refer to funding methods for eco-friendly businesses, such as electric vehicles and renewable energy.

Previously, in October of last year, Hyundai Mobis announced its plans to invest 1.3 billion dollars from this year through 2030 to establish new production hubs for electrification in North America. The plan includes building new Battery System Assembly (BSA) and PE System factories in four locations, including Alabama and Georgia, to respond to the growing global electrification market proactively. With this funding, it is anticipated that the electrification projects in North America will progress as planned.

Currently, Hyundai Mobis operates electrification production hubs in nine locations globally (six domestic and three overseas) and is establishing six new electrification production hubs in South Korea, North America, and Indonesia.

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Deal rationale

In an era where global financial institutions emphasise ESG, securing funds through Green Loans can offer favourable interest conditions and elevate a company’s eco-friendly image.

Hyundai Mobis believes it is enhancing its competitiveness in the electrification business through a strategy of selectivity and focus as it transitions into a ‘future mobility technology specialist’ and technology facilitator for OEMs.

Our signals coverage is powered by GlobalData’s Thematic Engine, which tags millions of data items across six alternative datasets — patents, jobs, deals, company filings, social media mentions and news — to themes, sectors and companies. These signals enhance our predictive capabilities, helping us to identify the most disruptive threats across each of the sectors we cover and the companies best placed to succeed.