An aerial view shows the construction site for the future Hyundai electric vehicle plant in Ellabell, Georgia, U.S., December 9, 2022. REUTERS/Cheney Orr
SAVANNAH, Georgia — Hyundai Motor Group and LG Energy Solution announced Thursday that they will spend an additional $2 billion and hire an additional 400 workers to make batteries at the automaker’s sprawling U.S. electric vehicle plant currently under construction in Georgia .
The announcement by the South Korea-based companies — one a major automaker, the other a leading maker of lithium-ion batteries used to power electric vehicles — expands a partnership launched three months ago to produce batteries at the same site west of Savannah, where Hyundai plans to start producing electric vehicles in 2025.
Thursday’s news brings the companies’ total investment in the Georgia facility to more than $7.5 billion and the projected total workforce at the site to 8,500.
“This incremental investment in Bryan County reflects our ongoing commitment to creating a more sustainable future, powered by American workers,” said José Muñoz, Hyundai Motor Company’s president and global chief operating officer, in a statement.
Hyundai announced it will invest $5.5 billion in 2022 to assemble electric vehicles and batteries on 2,900 acres (1,170 hectares) in the community of Ellabell.
The additional investments and jobs announced Thursday do not mean the Hyundai/LG battery plant will produce more batteries, Hyundai spokesman Michael Stewart said. The companies continue to anticipate that the plant will supply enough batteries for 300,000 electric vehicles per year, which is the same capacity stated when the joint venture was first announced in May.
“The plant has the potential to expand based on market conditions and demand,” Stewart said via email, adding, “Hyundai remains very optimistic about the transition to electric vehicles.”
According to Hyundai, the Georgia plant initially plans to produce 300,000 vehicles per year but could later expand to 500,000 per year.
Landing Hyundai’s first US electric vehicle manufacturing plant was hailed as the largest economic development project in Georgia’s history when it was first announced last year. Since then, suppliers have pledged to invest nearly $2.2 billion and hire 5,000 people.
“Today, we build on that success as we continue to make Georgia the e-mobility capital of the country,” Georgia Gov. Brian Kemp said in a statement, praising Hyundai and LG’s additional investment in the plant.
Georgia and local governments will provide additional stimulus, said Jessica Atwell, a spokeswoman for the state’s Department of Economic Development. However, she said these would not be announced until next week, after the documents are finalized.
State and local governments have already pledged $1.8 billion in tax breaks and other benefits. The new investment will allow for additional tax breaks that the company can legally claim, such as an additional $10 million in state income tax credits of $5,250 per job over five years. Atwell said state and local governments could also end up spending more on discretionary incentives like infrastructure aid and equipment subsidies.
The Hyundai package has already been described as the largest subsidy package ever promised by a US state to an auto plant. That’s according to Greg LeRoy, executive director of Good Jobs First, a group skeptical about subsidies for private companies.
The announcements are part of a rush towards electric vehicles and batteries in the United States. Under the US Inflation Reduction Act, EVs must be assembled in North America and a percentage of their battery parts and minerals must be sourced from North America or a US Free Trade Partner to qualify for a full $7,500 EV Tax Credit.
Currently, no Hyundai or Kia vehicles are eligible for the tax credit unless leased. Hyundai refused to exclude foreign vehicles, partly because the company builds American factories.
Hyundai will not only need batteries for vehicles manufactured in Ellabell. The company already assembles electric vehicles at its Montgomery, Alabama, plant and announced in April that it would begin assembly of its Kia EV9 full-size electric SUV at Kia’s West Point, Georgia plant.
