SAVANNAH ― Hyundai Motor Group held a ceremonial groundbreaking Tuesday near Savannah for its $5.54 billion electric vehicle “Metaplant,” its biggest investment outside South Korea, a future-defining wager in electrification and the largest economic development project in Georgia history.
José Muñoz, the president and chief operating officer of Hyundai Motor America, said the facility will be “the foundation of Hyundai Motor Group’s future in North America.”
“This is going to be a massive operation with a scale that is hard to comprehend,” Muñoz said.
The factory, where electric Hyundai, Kia and Genesis models will roll off the assembly line, is expected to open in January 2025, produce 300,000 battery-powered vehicles a year in its first phase and employ 8,100 workers. Muñoz told reporters that annual production could expand to 500,000 units and involve several —”maybe five or six” — new EV models.
The glitzy ceremony drew Republican Gov. Brian Kemp and the state’s two Democratic U.S. Senators, Raphael Warnock and Jon Ossoff, and numerous state and local elected officials to the 3,000-acre site along I-16 in Bryan County.
Site work has been underway for some time, but the ceremonial groundbreaking comes just two weeks before Election Day, with Kemp facing a challenge from Democrat Stacey Abrams and Democrat Warnock locked in a tight re-election battle with Republican Herschel Walker.
Kemp used the ceremony to tout his economic stewardship through the pandemic, and Warnock and Ossoff praised the bipartisan cooperation that stands to bring thousands of new jobs to the state.
Attendees in Bryan County were greeted by a huge temporary building with a stage, with Hyundai heavy construction equipment and the flags of all three brands stationed outside.
Kemp said since 2020, the state has announced 30 electric mobility-related projects, totaling more than $13 billion in corporate investments and nearly 19,000 promised jobs. “These are jobs of the future coming to Georgia,” he said.
The state has positioned itself to be a major player in EVs, also recruiting upstart Rivian, which plans a $5 billion factory about an hour east of Atlanta, where it will employ 7,500.
“The automotive industry will see more change in the next 10 years than in the prior 100,” Kemp said.
A midday community celebration followed the morning ceremony at downtown Savannah’s Enmarket Arena. Attendees perused a car show-style lineup of the company’s latest electric models and concept cars on the arena floor.
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.
Parts supplier Hyundai Mobis is said to be scouting sites near the future Hyundai factory.
State officials have said Hyundai will help boost employment in rural Georgia and ensure well-paying jobs for Georgia’s technical school and college graduates so they don’t leave for other states.
The left-leaning tax incentive watchdog Good Jobs First said it 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.
Kasia Tarczynska, a senior research analyst at Good Jobs First said Georgia is committing billions of dollars to help wealthy companies that are making the transition to EVs because of market forces and federal policy decisions promoting electrification. However, she questioned whether the use of taxpayer funds is a wise investment.
”Why do states and localities need to subsidize projects that will happen no matter what,” she said. “There are huge opportunity costs here.”
Tuesday’s ceremonies brought some relief to state and local officials after recent changes to U.S. EV tax credits caused concern in Georgia economic development circles that Hyundai might rethink or scale down its plans.
President Joe Biden’s signature climate and health bill, known as the Inflation Reduction Act, includes expansion of EV tax credits designed, in part, to spur more domestic production of EVs.
Compared to traditional fossil fuel-powered vehicles, EVs produce no carbon emissions on the road and are considered a key piece in limiting climate change. Ahead of the bill’s passage, Biden visited Korea and thanked Hyundai for its investment when Hyundai announced the Georgia plant in May .
But the new law caught foreign automakers off-balance, requiring all EVs to undergo final assembly in North America to qualify for consumer tax credits of up to $7,500 for each vehicle, among other stipulations. Hyundai, which currently manufactures all of its electric vehicles overseas, was among the automakers upset about the change, fearing it could harm sales until its Georgia plant and other North American factories are producing EVs.
Korean diplomats and Hyundai executives at Tuesday’s event said they generally support the legislation.
Amid Tuesday’s celebration, it was clear the law’s effects on Hyundai remain a sensitive subject when it comes to U.S.-Korean relations.
Tae-young Cho, the Korean ambassador to the United States, said Hyundai’s groundbreaking shows his country’s commitment.
But, “Korean companies are now at risk of being disadvantaged by the EV credits of this act,” he said.
Muñoz said vehicles produced at the Bryan County plant might not be fully eligible for the credits until Hyundai can start producing batteries in 2026.
Cho said the changes are not good for the Korean-U.S. partnership or for fighting climate change, as it limits consumer choice. But he said both governments are working to find a solution.
Warnock, who championed the Inflation Reduction Act, recently introduced a bill to tweak the tax credit policy to delay the final assembly provision from going into effect until after Hyundai’s factory is operational. He also wrote a letter to the Treasury Department urging flexibility in implementation of the new tax credit rules.