Hyundai electric vehicle factory to be built near Savannah

Large plant to bring thousands of manufacturing jobs to Bryan County in Georgia.

Credit: Stephen B. Morton for The Atlanta Journal-Constitution

Credit: Stephen B. Morton for The Atlanta Journal-Constitution

This article was updated at 6:05 p.m. with additional details throughout.

ELLABELL, Ga. — South Korean automotive giant Hyundai Motor Group on Friday confirmed plans to build a roughly $5.5 billion electric vehicle assembly and battery plant near Savannah that eventually could employ about 8,100 workers.

It is the second major electric vehicle factory announcement in Georgia since December as state economic development officials try to turn the Peach State into an important manufacturing hub for battery-powered automobiles.

In a ceremony near the Georgia coast, Hyundai officials and Gov. Brian Kemp outlined sprawling future operations to build electric cars and SUVs on a nearly 3,000-acre, state-owned megasite along I-16 in Bryan County. Hyundai officials said they will break ground in 2023 and start production in 2025 with capacity for 300,000 EVs a year.

It was just six months ago that Kemp and executives with California-based EV startup Rivian announced a $5 billion factory — and 7,500 planned jobs — coming to the area of Social Circle about an hour’s drive east of Atlanta.

“I have the privilege, for the second time in the same fiscal year, to welcome the largest economic development project in the state’s history,” Kemp said at Friday’s ceremony with Hyundai executives.

Hyundai’s big announcement came while President Joe Biden was visiting Seoul as part of a trip to South Korea and Japan to boost economic and security ties. Biden has pushed to electrify the federal fleet and encourage more EV production and green jobs in the U.S., and the president is expected to meet with Hyundai leaders and thank them for their investment before departing for Japan.

The South Korean automaker also confirmed its plans ahead of Tuesday’s primary elections in Georgia, where Kemp is trying to fend off Republican challenger David Perdue. Kemp, who is ahead by double digits in the polls, has been touting his stewardship of the state’s economy on the campaign trail, including a record low unemployment rate.

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Credit: Stephen B. Morton for The Atlanta Journal Constitution

The Bryan County factory is part of Hyundai’s plan to invest $7.4 billion in the U.S. by 2025 to expand EVs and “smart mobility” services.

“This high-tech EV plant represents the future of our business,” said Jae Hoon Chang, Hyundai Motor’s president and CEO.

Hyundai officials said they chose Georgia for its EV hub because of its business climate, workforce and the company’s existing supplier network. The state boasts global connections via Atlanta’s Hartsfield-Jackson International Airport and two seaports in Savannah and Brunswick.

Hyundai committed to $1 billion in investments from its supplier network, which could lead to thousands of additional jobs, Pat Wilson, the state’s economic development commissioner, said in an interview.

Hyundai Motor subsidiary Kia announced its first U.S. plant in West Point in 2006, and the Georgia factory now employs more than 2,700 people manufacturing gasoline-powered vehicles.

Kia officials have given every indication the West Point plant near the Alabama border will remain a critical part of its U.S. operations, and the new factory will help Georgia’s supplier network transition to the EV future, Wilson said.

“This solidifies jobs all across the state,” he said.

New plant to be highly automated

Plug-in vehicles are widely seen as the future of the industry, and states have clamored to win new EV factories by showering automakers with billions in incentives.

Jose Munoz, president and CEO of Hyundai Motors America, said the new factory will be highly automated and deploy the latest robotic technology. He said the future factory will be the Hyundai group’s largest investment ever outside Korea.

The motor group wants EV manufacturing to grow exponentially to 3.23 million EVs a year globally by 2030, he said.

But challenges for the auto industry have started to emerge, including pandemic-influenced supply chain interruptions for computer chips and other vital parts. And questions remain whether the supply chain — from mining to refining to production — can support the heavy demand for batteries as automakers ramp up their EV plans.

Chang said the pandemic, chip shortages and other product shocks have taught him the importance of having a robust supply chain to continue operations.

The Hyundai group includes the Hyundai, Kia and Genesis brands. The company said it will produce a “wide range” of electric models, but that it would share specifics about the brands or models to be built at the new plant later.

Hyundai also will build batteries at the site with a joint venture partner that will be announced later.

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Georgia, South Korea have long history

Georgia and South Korea already have deep ties. Georgia has operated a trade office in South Korea since 1985 and South Korea has a consulate in Atlanta serving the Southeast.

South Korea ranked as Georgia’s 12th-largest export market in 2020, while South Korea ranked as the fourth-largest exporter of goods to the Peach State, according to state data.

States covet auto factories because they bring billions in investment, thousands of middle-class jobs, and the likelihood of spinoff jobs from a network of suppliers. Kia already has a web of suppliers in Georgia that support its West Point factory, where it builds gas-powered Sorento and Telluride SUVs and K5 sedans.

EVs make up about 3% of U.S. auto sales, but that is expected to grow exponentially as fuel and emissions standards tighten and costs to build EVs drop, making them competitive in price with conventional vehicles.

The Hyundai and Rivian projects combined would bring more than 15,000 manufacturing jobs to Georgia. Another 3,000 jobs have been promised as part of a $2.6 billion SK Innovation battery plant an hour northeast of Atlanta, which started production in January. SK Innovation, like Hyundai, is based in South Korea.

The projects have come with head-turning incentive packages. Hyundai is likely to receive tax breaks and other incentives rivaling the $1.5 billion package of grants, tax breaks, free land, worker training and infrastructure offered to Rivian. SK commanded a $300 million incentive package.

Taxpayer watchdogs and economists have slammed the deals as giveaways to wealthy corporations. High-tech deals, like Wisconsin’s grand dreams for Foxconn a few years ago, often come with many promises, but don’t always succeed.

“Even successful companies do not always deliver on their jobs and investment promises,” Kasia Tarczynska, a senior researcher at incentives watchdog Good Jobs First, said in a recent interview.

State officials have framed the incentive packages as necessary to land projects that could transform rural stretches of the state. They say the factories ensure well-paying jobs for Georgia’s technical school and college graduates, so they don’t leave for other states.

Hyundai deal follows pushback over Rivian plant

The Rivian project has faced pushback from a grassroots opposition group. And Perdue, the former U.S. senator and Kemp’s top Republican primary challenger, has bashed the governor over the deal and its lucrative incentive package.

But Kia and Hyundai are more difficult targets politically for Perdue to attack.

Perdue’s cousin, former Gov. Sonny Perdue, successfully recruited Kia to Georgia in 2006. The West Point factory opened in 2009 at a time Georgia was still mired in the Great Recession and as West Point and surrounding areas were still reeling from losses in its textile industry.

The Kia plant, along I-85, has been a roaring success for Kia and runs 24 hours a day with three shifts, producing 340,000 vehicles a year, according to the company.

The new Hyundai Motor factory “has the potential to change the economic fabric” of not only Bryan County but neighboring counties, said Michael Toma, an economist at Georgia Southern University.

“This will be a labor draw for 60 miles in any direction, so it will not only affect the Savannah metro area, but also the counties immediately to the West like Bulloch County, where Statesboro is,” he said. “You can assume individuals will be willing to drive 60, maybe 75 minutes to work in a facility like that that pays above average wages.”

--Staff writer Drew Kann contributed to this report.

A note of disclosure

Cox Enterprises, owner of The Atlanta Journal-Constitution, owns about a 4% stake in Rivian and supplies services to the company. Sandy Schwartz, a Cox executive who oversees the AJC, is on Rivian’s board of directors and holds stock personally. He does not take part in the AJC’s coverage of Rivian.