Incentives for SK-Hyundai EV battery plant could total $641M

Joint venture represents nearly $5B investment and will include 3,750 jobs
Pictured here is the SK Battery America plant in Jackson County. SK and Hyundai Motor Group have partnered on a planned factory for Bartow County.

Credit: SK Battery America

Credit: SK Battery America

Pictured here is the SK Battery America plant in Jackson County. SK and Hyundai Motor Group have partnered on a planned factory for Bartow County.

Two Korean conglomerates could receive more than $640 million in grants, tax breaks, free infrastructure and other incentives from state and local governments to build a $5 billion battery factory in Bartow County.

The incentive package offered to SK On was detailed in documents obtained by The Atlanta Journal-Constitution through the Georgia Open Records Act. The company, which later brought on Hyundai Motor Group as an equal partner, announced plans in December for the factory near Cartersville. It’s expected to employ at least 3,750 workers with an average wage of nearly $53,000.

The factory, roughly the size of two Lenox Square malls, will join other multibillion-dollar endeavors by SK and Hyundai across Georgia, furthering the Peach State’s status as an EV hub. The Bartow plant will supply batteries to the Kia factory in West Point and a Hyundai plant in Alabama that are incorporating EVs into their production lines.

Georgia has successfully recruited EV assembly plants from Hyundai and Rivian, plus numerous battery factories and facilities central to the EV and battery supply chain. The state’s success has come in part thanks to billions in incentives offered by the state and local governments.

Since 2020, EV makers and their suppliers have announced more than 40 projects totaling more than 28,000 announced jobs and $22.7 billion in anticipated investment, according to Gov. Brian Kemp’s office.

“Every state wants those projects, because those are great jobs,” said Georgia Department of Economic Development Commissioner Pat Wilson. “...You recruit companies like (SK and Hyundai), knowing that the supply chain follows and expansion follows.”

Texas was Georgia’s chief rival for the battery plant.

Critics argue states, cities and counties offer incentives with a loose hand, shifting the burden of paying for growth onto other taxpayers. Bartow County and Cartersville are chipping in about $303 million in tax breaks and infrastructure, about 43% of the total incentive package for the SK-Hyundai plant.

The largest inducement is an estimated $191 million in tax savings from a 25-year local tax abatement. Cartersville-Bartow County Economic Development Executive Director Melinda Lemmon said the value is about $175 million when building and equipment depreciation is taken into account.

Later this month, Georgia lawmakers will begin a review of more than 50 tax credit programs, ranging from incentives for film to job tax credits offered automatically to most large employers. Proponents argue the tax deductions have boosted and diversified the state’s economy, while critics say the economic benefits are overblown if not entirely offset by the incentives’ cost.

Greg LeRoy, executive director of left-leaning incentives watchdog Good Jobs First, has scrutinized many of Georgia’s largest incentive deals. Two of Georgia’s largest, the $1.8 billion offered Hyundai for an EV plant near Savannah and $1.5 billion package offered EV startup Rivian, based certain incentives thresholds on average wages. Cox Enterprises, which owns the AJC, holds about a 4% stake in Rivian.

He said Georgia should base incentive awards off median wages rather than average wages as executive positions can skew the numbers.

“Georgia’s SK job quality contract is as tight as Swiss cheese,” he said.

Staving off competition

SK and Hyundai each have deep Georgia roots.

SK operates a battery plant in Jackson County, northeast of Atlanta. Hyundai, meanwhile, is building a $5.54 billion EV and battery factory near Savannah, where the company expects to build plug-in Hyundai, Kia and Genesis models starting in 2025.

SK’s expansion plans in the United States center on EVs as the federal government promotes electrification to combat climate change. When SK targeted the Southeast for another battery plant, Wilson said Georgia had to craft an enticing offer, despite SK’s existing relationship with the state.

But Georgia’s offerings aren’t as rich as some states, Wilson said. Georgia was recently outbid by Tennessee for BlueOval City, a joint EV plant by SK On and Ford. Tennessee ponied up $884 million in freebies, including a $500 million grant.

“We are not anywhere near what our competitor states are putting on, so I think that shows we are developing the ecosystem that we don’t have to put what other states put into these projects,” he said.

Georgia’s incentive package for SK-Hyundai includes $40 million to buy and prepare the 600-acre Bartow site, improvements to local roads and wastewater systems. The total value of Georgia’s offer could grow as tax breaks for certain aspects of the project aren’t fully disclosed and are based on expenditures that are not public record as they might disclose trade secrets.

A SK spokesperson said the company chose Bartow “for many reasons, including access to potential employees, availability of land for a large-scale manufacturing project and proximity to the final EV assembly site.”

Nate Jensen, a professor at the University of Texas at Austin who studies economic development strategies, said auto manufacturing plants have historically been seen as prize projects, since they often attract their suppliers.

Michael Toma, an economist at Georgia Southern University, said Georgia is building a network of EV projects for companies to tap into. He said the auto industry and new factories carry such high startup costs that public support is needed and often pays off long-term as states “capture” the new industry.

“Once there’s a critical mass attained in that growing industry, then you’ll see more organic growth just naturally happening because other manufacturers or other suppliers will just migrate to this area because it’s well established,” Toma said.”

But Jensen said megaprojects like auto factories almost always receive further incentives, regardless of how much investment is nearby. He said placing large bets on emerging industries can be risky and may not be “the superstar they hoped for.”

Correction: An earlier version of this story cited a state document that included an incorrect figure for the estimated value of local property tax savings to SK On. A state spokesperson confirmed the figure was a clerical error, and the story was updated on June 16, 2023.

Our reporting

The AJC obtained documents via a Georgia Open Records Act request detailing the incentives that state and local officials offered SK On to build its electric vehicle battery plant in Bartow County. The newspaper has detailed the project since it was announced in December in addition to several other EV-related projects across the state.


SK-Hyundai incentives

South Korean conglomerates SK Innovation and Hyundai Motor Group are planning a nearly $5 billion electric vehicle batteryplant in Bartow County.

Below, are some of the more significant incentives offer by state and local governments to land the factory.

Total value: $641.4 million*†

- $191 million in local property tax breaks over 20 years

- $98 million in megaproject tax credits

- $46 million water treatment plant

- $40 million REBA grant

- $11 million in Georgia Quick Start job training for new workers

- $6 million in gas system and road improvements

- $3.4 million in impact fee cost avoidance

*Values are rounded and does not include a tax exemption on machinery and construction materials that had its value redacted.

†Total value does not include certain incentives that are based on future potential expenditures