Hyundai rushes to open plant in Georgia because of law rewarding domestic production of electric vehicles – WABE

A top Hyundai executive said Tuesday that the company is eager to begin producing electric vehicles and batteries as quickly as possible at a $7.6 billion complex on the Georgia coast, spurred by government incentives for electric vehicles that reward domestic production.

Jose Munoz, president and global chief operating officer of Hyundai, made the comments to reporters in Atlanta after signing a partnership with Georgia Tech aimed at strengthening hydrogen-powered vehicle research and producing workers for the Korean company. Among the participants was Euisun Chung, CEO of parent company Hyundai Motor Group.

The company, which also makes Kia and Genesis vehicles, has complained that the Inflation Reduction Act is unfair to companies that import electric batteries or vehicles from outside North America. The sweeping federal law, one of President Joe Biden's key achievements, is aimed in part at combating climate change. The law provides a tax credit that can save electric vehicle buyers up to $7,500, but only for cars made in North America with domestic batteries.

Hyundai and other companies that sell imported vehicles were still helped by the law because dealers can apply the credit to any leased electric vehicle, regardless of where it was manufactured, to reduce a customer's monthly payment. Munoz presented figures on Tuesday showing that Hyundai Group sold or leased the second-largest number of electric vehicles in the US in the first six months of 2023, behind only Tesla.

Still, the law pushes Hyundai to make batteries and electric vehicles in the U.S. more quickly, Munoz said, with the company accelerating construction to try to start production in Georgia sometime in 2024.

“We decided to double down,” Munoz said. “We are trying to accelerate the project as much as possible. And we are confident that the original date of January 2025 will likely be brought forward by around three months. If we can, even more.”

South Korean automaker and battery partner LG Energy Solution recently increased its investment in the complex's battery production by another $2 billion. They also promised to hire an additional 400 workers and increase total employment to 8,500. Munoz said the investment will allow the company to produce more batteries at Ellabell than originally planned, increasing capacity enough to supply batteries for all 300,000 vehicles Hyundai plans to assemble there.

“We want to ensure that battery sourcing is 100% U.S.-based to comply with the IRA,” Munoz said, adding that the increased investment would also ensure Hyundai and LG have “the best possible technology” for the batteries Use in the manufacture of batteries.

Munoz said construction of the plant outside Savannah is progressing quickly and was not impacted by Hurricane Idalia last month. Hyundai could be eligible for $2.1 billion in state and local tax breaks and commit to paying workers an annual average of $58,105 plus benefits.

Munoz emphasized the company's commitment to all-electric vehicles and said it will continue to produce gasoline-electric hybrid vehicles for now, but said Hyundai views customers using hybrid vehicles as a “stepping stone” to non-gasoline vehicles. Some other automakers, such as Toyota Motor Co., have focused their efforts on plug-in hybrids.

He said the company wants to power heavy trucks and long-haul vehicles with fuel cells that convert hydrogen into electricity through a chemical reaction.

“So battery electric vehicles are great for passenger vehicles and commuters, but the hydrogen-based fuel cell electric vehicles are the best technology we see for heavy-duty vehicles and then for very long range,” Munoz said.

The company hopes Georgia Tech's research expertise in hydrogen can help Hyundai advance the technology. This is part of the agreement signed on Tuesday. Hyundai already makes hydrogen-powered heavy-duty trucks in South Korea and Georgia. State officials recently asked for proposals to build hydrogen fueling stations along Interstate 16 between the Hyundai plant and the Port of Savannah.

Tuesday's agreement, which Georgia Tech President Angel Cabrera called “a big deal for us,” is also expected to open a pipeline for graduates looking for jobs at Hyundai.

“More and more of the jobs we are creating are high-skilled and highly skilled,” Munoz said. “When you see how our system will work, it is like a laboratory. So we need a lot of young talent.”