Hyundai factory groundbreaking highlights EV promise and challenges

Georgia vies to become electric vehicle manufacturing hub
Hyundai breaks ground in Georgia for its first electric vehicle plant in the US

Hyundai breaks ground in Georgia for its first electric vehicle plant in the US

SAVANNAH – Inside the glitzy Enmarket Arena, VIPs and residents crowded around shimmering Hyundai, Kia and Genesis electric vehicles and concept cars in a scene reminiscent of an international auto show.

And like an auto show, the promise of tomorrow was center stage. Company and government leaders touted new technologies and thousands of jobs as Hyundai Motor Group EV broke ground nearby on a $5.54 billion factory, the South Korean giant’s biggest investment outside its home nation.

“Together we will build the most sustainable and technologically advanced mobility production hub in the world,” José Muñoz, CEO of Hyundai North America, told a crowd of about 700 inside the arena.

Tuesday’s festivities for Hyundai’s Metaplant America highlighted not only the potential of landmark investments to make Georgia an international electric vehicle hub, but also the challenges to fulfill that vision.

Hyundai is under an aggressive timeline to build the 17 million-square-foot EV factory in time to start production in January 2025. It says the plant, 30 minutes west of Savannah on I-16 in Bryan County, will employ 8,100 people.

Two hundred miles northwest of Hyundai’s site, and an hour east of Atlanta, upstart Rivian is preparing a $5 billion EV and battery factory of its own. Rivian also is slated to start production in 2025, and has promised 7,500 jobs.

The 2021 IONIQ Concept Seven was on display Tuesday October 25, 2022 during a Hyundai community celebration at the enmarket Arena.

Credit: Richard Burkhart/Savannah Mornin

icon to expand image

Credit: Richard Burkhart/Savannah Mornin

Hyundai and Rivian, the two biggest economic development projects in state history, are the centerpieces of Georgia’s multibillion-dollar commitment of incentives and infrastructure to coax automakers and suppliers to the Peach State.

Washington is committing hundreds of billions more to convince consumers and businesses to buy electric, develop charging infrastructure and make sure the U.S. can catch up to China to secure the rare minerals and other resources necessary to build a sustainable EV ecosystem.

The Biden administration is pushing aggressive goals to make EVs 50% of all new vehicles sold in the country by 2030. Sales of EVs today make up a fraction of total U.S. auto sales. But as overall vehicle sales have declined from last year, EVs are surging.

More than 548,000 EVs were sold in the U.S. through the first nine months of this year, up 70% compared to the same period in 2021, according to auto data firm Kelley Blue Book, which like The Atlanta Journal-Constitution is a Cox Enterprises company. EVs made up about 5.4% of all new car sales in the first three quarters of this year, up from 2.7% last year.

But there have been potholes in the EV superhighway.

The Hyundai groundbreaking exposed diplomatic tensions between Seoul and Washington over recent changes to U.S. tax credits that Hyundai says put electric cars it builds overseas today at a disadvantage. Inflation and a slowing economy hover as dark clouds on the horizon.

Rivian, too, has taken a hit from changes in EV tax credits, and the company has suffered production challenges, recalls and a local court ruling that put in doubt local property tax breaks that make up part of the package of perks Georgia offered to land the future factory.

Pat Wilson, Georgia’s commissioner of economic development, said the state is confident in both Hyundai and Rivian, and that a local development authority will prevail in its pending court appeal of the incentives decision.

He also pointed to the chorus of EV-related announcements bringing thousands of jobs to the state.

“This transition is happening so fast that they have to be in the market,” Wilson said of automakers. “Companies are making these decisions based on the next 50 years, not really what they’re seeing in the economy right now.”

Tax credit curveball

Hyundai officials said the new coastal factory will be capable of producing 300,000 Hyundai, Kia and Genesis EVs a year in its first phase, expandable to 500,000 pending customer demand. The bulk will be sold in the U.S.

Hyundai announced the project in May and Biden thanked the company for its investment during a visit to Korea.

But in August, Hyundai and other foreign automakers that announced new U.S. factories were thrown for a loop when the Democrats’ climate and health bill changed $7,500 federal EV tax credits, ending eligibility for plug-in vehicles assembled overseas.

Hyundai currently builds all its EVs in Korea and its cars might not fully qualify for tax credits until 2026, when battery production is expected to start in Georgia.

The company says that limits consumer choice and slows electrification while hurting economic allies. Some of its EV brands are among the most popular in the U.S., including the Hyundai Ionic 5 and Kia EV6.

Muñoz, the Hyundai executive, told reporters he is hopeful the Biden administration can find an administrative fix without new legislation, which would face an uphill battle in Congress. U.S. Sen. Raphael Warnock, D-Ga., who supported the climate bill, has authored legislation to provide Hyundai relief until it can start production, and has urged the U.S. Treasury for flexibility in interpreting rules.

‘They’re committed’

Gov. Brian Kemp and his predecessor, Nathan Deal, have targeted EVs for years.

At a ceremony Tuesday at the future Hyundai factory site, Kemp said the state has announced 30 electric mobility-related projects since 2020, totaling more than $13 billion in corporate investments and nearly 19,000 promised jobs.

State and local leaders have touted Hyundai’s on-site jobs and investment as well as commitments to bring thousands more jobs at suppliers around Georgia as justification for a record-breaking $1.8 billion incentive package.

In an interview Monday with the AJC, Kemp said the Hyundai plant will not only be big for Savannah, but for other communities on the I-16 corridor.

“Part of our plan to strengthen rural Georgia was to create the rural strike team that’s working on the ground every day,” Kemp said. “But it was also to create mega sites spread out around the state because we know that projects like this have regional significance. Our pipeline is not slowing down.”

In a recent report, left-leaning incentive watchdog Good Jobs First found states and local governments had contributed some $13.8 billion in incentives to land at least 51 EV and electric vehicle battery plants in recent years. Of that total, Georgia committed some $3.3 billion to Hyundai and Rivian through various grants, tax credits, worker training, land and infrastructure.

Georgia is subsidizing wealthy companies that are making the transition to EVs because of market forces and federal policy promoting electrification, said Kasia Tarczynska, a Good Jobs First senior research analyst.

“Why are we doing this again, giving away billions?” Tarczynska said.

December 16, 2021 Atlanta - Georgia Governor Brian Kemp and First Lady Marty Kemp react as they sit inside Rivian R1T electric truck during a press conference at Liberty Plaza across from the Georgia State Capitol in Atlanta on Thursday, December 16, 2021. Electric vehicle maker Rivian on Thursday confirmed its plans to build a $5 billion assembly plant and battery factory in Georgia, which Gov. Brian Kemp called Òthe largest single economic development project ever in this stateÕs history.Ó (Hyosub Shin /


icon to expand image


Opponents of the Rivian plant, located near Social Circle, notched a legal victory recently when a judge sided with them in a challenge of $700 million in local incentives offered the company.

The Rivian factory, set for about 2,000 acres along I-20 in southern Walton and Morgan counties, was first announced in December.

Ocmulgee Judicial Circuit Chief Judge Brenda Holbert Trammell ruled a local development authority “failed to establish” that bonds at the center of the Rivian project “are sound, feasible and reasonable,” and that the type of land lease negotiated with Rivian is one subject to property taxes.

Site work at the Rivian plant continues, and Wilson, the state’s top recruiter, said he expects the company will hold a ceremonial start of construction soon.

“We are very upset and absolutely disagree with the judge’s ruling,” he said. “This is a company that needs to be manufacturing and they’re investing in Georgia. They’re committed and we are too.”

On Friday, the state and the local development authority said they filed notice of their intent to appeal the judge’s ruling.

Manufacturing workers assemble electric vehicles at Rivian in Normal, Ill., on July 20, 2022. (Photo for the Atlanta Journal Constitution by Ron Johnson)


icon to expand image


Rivian declined to comment.

Earlier this year, Rivian scaled back production goals amid supply chain issues. As a startup, Rivian has been expected to report quarterly losses for some time as it ramps up production.

Rivian reported a net loss of $1.7 billion in the second quarter, the most recent for which it reported earnings. But the company has said it expects to meet its current production goal of 25,000 vehicles in 2022 at its first plant in Illinois, and boosted output to 7,363 units in the third quarter.

-Staff writer Greg Bluestein contributed to this report.

A note of disclosure

Cox Enterprises, owner of The Atlanta Journal-Constitution, also 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.