According to Hyundai Motor Group and LG Energy Solution, the automaker will need $2 billion and 400 additional battery manufacturers to build its huge electric car production in Georgia.
The two South Korean companies, one of which is a major automaker and the other a leading maker of lithium-ion batteries used to power electric vehicles, made the announcement as an extension of a partnership they started three months ago to make batteries at the same site west of Savannah, where Hyundai plans to start making electric vehicles in 2025.
With the news on Thursday, the companies have now spent more than $7.5 billion on the Georgia plant and plan to hire 8,500 people there.
Jose Muoz, president and global chief operating officer of Hyundai Motor Company, remarked, “This small investment in Bryan County shows that we are still committed to building a more sustainable future powered by American workers.”
The Company said it would spend $5.5 billion in 2022 to build electric cars and batteries on 2,900 acres (1,170 hectares) in the Ellabell neighborhood.
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Hyundai clarifies plant production will not increase despite investment
Hyundai spokesperson Michael Stewart clarified on Thursday that the plant would not increase production as a result of the announced increases in spending and employment. Even though the joint venture was first announced in May, the companies still think that the plant will be able to make enough batteries for 300,000 EVs per year.
“The plant could grow, depending on how the market is doing and how much demand there is,” Stewart said in an email. “Hyundai is still very optimistic about the switch to electric vehicles.”
Hyundai has said that at first, the Georgia plant will make 300,000 cars per year, but it could grow to make 500,000 cars per year in the future.
Getting Hyundai’s first U.S. EV facility was Georgia’s top economic development priority last year. Since then, companies have promised to invest nearly $2.2 billion and hire 5,000 people.
“Today, we’re building on that success as we continue to make Georgia the e-mobility capital of the nation,” Georgia Gov. Brian Kemp said in a statement about Hyundai and LG’s new investments in the plant.
Jessica Atwell, a spokeswoman for the Georgia Department of Economic Development, said that the state and local governments will offer more rewards. She said they won’t be disclosed until next week after all the paperwork is done.
State and local governments could spend more on incentives for company
State and local governments have already promised tax breaks and other perks worth $1.8 billion. With the new investment, the company will be able to get more tax breaks, such as another $10 million in state income tax credits worth $5,250 per job over five years. Atwell said that state and local governments could also end up spending more on incentives like infrastructure help and equipment subsidies.
People have already said that the Hyundai package is the most extensive subsidy package a U.S. state has ever given to a car plant. Greg LeRoy, who runs a group called Good Jobs First and is against providing funding to private companies, says this.
The statements are all part of a rush to make electric cars and batteries in the United States. Electric vehicles made in North America and using battery components and minerals from North America or a U.S. free trade partner are qualified for the maximum $7,500 EV tax credit.
At the moment, you can’t get a tax credit for a Hyundai or Kia car unless you lease it. Hyundai fought against keeping foreign-made cars out, in part because it is building plants in the United States.
Hyundai won’t just need batteries for cars made in Ellabell. The company already makes electric cars at its plant in Montgomery, Alabama, and in April, it said it would start making the electric Kia EV9 big SUV at its plant in West Point, Georgia.
