SEOUL—Hyundai Motor Co and SK On plan to invest about $1.88 billion to build a new joint venture battery factory in the United States.

Hyundai Motor and SK On, the battery unit of energy group SK Innovation Co Ltd, are expected to sign a memorandum of understanding on the investment in December.

Targeted to start in the first quarter of 2026, the plant aims to have an initial annual production capacity of about 20 gigawatt hours (GWh), enough to power about 300,000 electric vehicles.

The new factory will likely be located in Georgia, near Hyundai’s new EV assembly plant. Construction of that factory began in October, and production is expected to begin in the first half of 2025. At full capacity, the plant will have an annual capacity of 300,000 vehicles.