Hyundai to invest $7.4 bln in the U.S. by 2025

South Korea's Hyundai said on Thursday it plans to invest $7.4 billion in the United States by 2025.

Most of it will go towards producing electric vehicles, as the automaker seeks to capitalise on President Joe Biden's green policies.

Biden has pledged to replace the 650,000 vehicles in federal fleets with U.S.-made electric vehicles.

He's also called for $174 billion in new spending to boost electric vehicles and charging.

And he wants to ensure the jobs are kept at home.

In January, he signed an executive order to prioritise American-made products in government procurement schemes.

The move was aimed at strengthening domestic manufacturing and creating markets for new technologies.

Analysts said Hyundai's U.S. investment was essential to take advantage of the EV subsidies and tax incentives.

The company will begin electric vehicle production at a U.S. facility next year, while affiliate Kia also plans to build electric vehicles in the United States.

Hyundai has a factory in Alabama, while Kia produces its cars in Georgia.

As part of his strategy to tackle climate change, Biden wants to decarbonize the U.S. economy entirely by 2050.