Hyundai Bets Big on Georgia Investing 5.5 billion on Electric Vehicles
South Korea's Hyundai Motor Group said Saturday it will invest US $5.54 billion to build a dedicated electric vehicle and car battery manufacturing plant in the United States to further solidify its electrification push in the world's most important automobile market. The announcement comes during US President Joe Biden visit to South Korea as part of his first trip to Asia amid ongoing tension with China and continued provocations from North Korea.
Hyundai Motor Group plans to start construction on the 300,000-unit-a-year EV and battery manufacturing plant in January 2023 and begin production in the first half of 2025, the State of Georgia said in a statement. The group said it has selected Georgia due to the state's speed-to-market, workforce, and ability to meet the company's carbon neutrality standards. Georgia is home to an existing network of Hyundai subsidiaries and suppliers.
"The US has always held an important place in the Group's global strategy, and we are excited to partner with the State of Georgia to achieve our shared goal of electrified mobility and sustainability in the US," Hyundai Motor Group Chairman Euisun Chung said in the statement.
Governor Brian Kemp called Hyundai's investment the largest economic development project in the state's history. The group's non-affiliated suppliers will invest an additional $1 billion in the plant, generating at least 8,100 new jobs in Georgia, according to the statement.
The proposed new EV plant in Georgia would help Hyundai Motor Co. and Kia Corp. strengthen their lineup as they plan to launch all-electric SUVs, such as the Hyundai IONIQ 7 and the Kia EV9, in the US Hyundai has a plant in Alabama and Kia has a plant in Georgia.
Last month, Hyundai Motor announced it will invest $300 million in the Alabama plant to begin production of the Santa Fe gasoline hybrid model and the all-electric GV70 SUV under its luxury Genesis brand later this year.
Hyundai Motor plans to roll out 17 EV in the next eight years, including six Genesis models, with Kia scheduled to release 14 EVs by 2027. Hyundai and Kia aim to sell 3 million EVs, including 840,000 units in the US, accounting for 12 percent of the global EV market.
Their EV plans are in line with the Biden administration's drive to attract more investment in EVs and generate more jobs in the industry. The US government aims to increase the sale of EVs to account for half of the vehicles sold in the US by 2030.
Global carmakers have been racing to become eco-friendly amid tightened regulations on emissions of greenhouse gases, which scientists say are to blame for global warming. Hyundai's expanded EV output capacity would help the world's fifth-largest carmaker better compete with its rivals in the upcoming era of zero-emission vehicles, analysts said.
"Hyundai appears to take the two-track strategy by upgrading its existing domestic plants for EV production in brownfield investment and by building the US EV facility in greenfield investment," Kim Jin-woo, an analyst at Korea Investment & Securities Co., said by phone.
Hyundai's investment decision is aimed at receiving government subsidies for its EV sales in the US market among others, said Kwon Yong-joo, a professor in the automotive and transportation design department at Kookmin University. He expected Hyundai to partner with LG Energy Solution Ltd., South Korea's leading car battery maker, to build a battery cell facility near the planned EV plant.
Source: Yonhap, The Korean Herald (2022)
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