State, locals offered $1.8B in incentives for Hyundai EV plant

State says deal key to landing generational project, but tax watchdog said such deals too generous to corporations.

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

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

State and local officials promised Hyundai Motor Group an incentive package that could grow to more than $1.8 billion to build a sprawling electrical vehicle factory near Savannah, the largest package of inducements Georgia has ever offered a corporation for the state’s biggest-ever jobs and investment deal.

The package shatters a record set only in May with a $1.5 billion agreement reached with EV startup Rivian for a factory east of Atlanta. The two deals, collectively, represent more than $3 billion in potential incentives to the two companies — if they meet their commitments of billions of dollars in investments and more than 15,000 combined jobs.

State officials say the pay-off will be dramatic. Skeptics say even when such deals produce what they promise, it is taxpayer-subsidized growth, with little accounting for whether the benefits or giveaways are greater.

The deal with Hyundai, like Rivian before it, includes tax breaks for each new job created, free land and worker training and infrastructure improvements for the rural Bryan County site. In exchange, Hyundai committed to create 8,100 jobs and transform a nearly 3,000-acre tract along I-16 near the Ellabell community into an EV and battery production hub, documents released Friday show.

State officials have said Hyundai and Rivian represent generational opportunities to create and preserve high-tech manufacturing jobs as the automotive industry shifts to plug-in vehicles, which are expected to make up a larger share of total auto sales in the decades ahead.

“Georgia is proud to welcome the two single-largest job-development projects in state history within a six-month period, both of which are part of the EV ecosystem,” Georgia Economic Development Commissioner Pat Wilson said. “Not only do these generational projects solidify our spot at the vanguard of the EV transition, but they also ensure that thousands of Georgians across the state will benefit from the jobs of the future.”

Georgia officials have said the state’s talented workforce, quality of life and pro-business reputation helped cement the Hyundai agreement — and that incentives were the sweetener.

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Wilson said the project, known as the Hyundai Motor Group Metaplant America, and its battery joint venture operations, will attract thousands of additional jobs from suppliers that will locate nearby. The future Hyundai factory’s payroll “will reach $4.7 billion over 10 years,” he said.

States have launched unprecedented bidding wars to land EV and battery plants. Tennessee, Texas, North Carolina, Michigan and Kentucky are among the states that have announced major EV or battery factories in recent years, from names including Tesla, Ford and General Motors.

“Many states, especially Georgia, are really opening up their wallets wide (to EV companies) for many years,” said Greg LeRoy, executive director of left-leaning incentives watchdog Good Jobs First. “And that’s the problem with these deals… and we’re worried that a lot of states are overspending right now at a time when a lot of people think there’s going to be a recession and tax revenues will go back down.”

Tax credits, free land part of pitch

Hyundai is the parent of the Hyundai, Kia and Genesis brands and the company has bold plans to transform its fleet in the coming years. Hyundai’s incentive deal is similar to the one struck with Rivian and made public in May.

Among the elements of the agreement unveiled Friday is Hyundai’s commitment to spend at least $5.5 billion on two plants, one making electric vehicles, the other batteries with a partner.

Hyundai has committed to hiring at least 8,100 by the end of 2031, and the average Hyundai wage is listed as more than $58,000. Hyundai separately committed to having its suppliers invest $1 billion in Georgia manufacturing operations.

The biggest single piece of the package involves a local tax abatement for the nearly 3,000-acre factory site, according to a state offer letter. The offer letter pegs it at $502 million based on a $5.9 billion investment, but a state official said the value will be $472 million based on a $5.5 billion commitment from Hyundai.

Hyundai will receive free land valued at about $109 million, which it will control under the terms of a lease. In exchange for typical property taxes, Hyundai will pay fixed tax payments under the lease agreement, starting at about $12.6 million in 2026 and rising in later years through 2048.

The state said through 2048, Hyundai will pay about $357 million in tax payments to local communities, much more than the land’s current tax bill, but a substantial savings over the life of the deal.

“It is going to be an economic driver, not just for this community, but for the region,” said Carter Infinger, chairman of both the Bryan County Board of Commissioners and the area’s joint development authority. “I am as assured of that as I can be, or I wouldn’t have done the deal. I think it will be dramatic.”

Other generous perks in the deal are built into Georgia law, including about $212.6 million from a recently-altered “mega tax credit” program that offers incentives at $5,250 per new job created annually for five years for companies readying major investments in Georgia.

Hyundai could also qualify for tax exemptions for high-tech machinery of more than $280 million and an unspecified amount for research and development costs.

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Credit: Stephen B. Morton for The Atlanta Journal Constitution

The state and the local Joint Development Authority committed to clear and prepare the site for Hyundai. The state agreed to spend about $200 million on improving area roads, including a new I-16 interchange, and $6.9 million building a rail line to the site.

The state will build a $62.5 million worker training center for its Quick Start program, which will help prepare Hyundai workers. The state will also fund the $5 million annual operating costs for five years.

Hyundai must meet certain milestones for job creation and investment or be subject to having to forfeit some of those incentives — provisions known as claw backs.

Hyundai must fulfill 80% of its jobs and investment promises by the end of 2031 and hold them through 2048, or else be subject to state claw back provisions, state documents show, with annual compliance checks.

Hyundai Motor Group incentives

Some of the larger components of Georgia and local officials’ offer for the future EV and battery facility.

At least $472 million – estimated value of local property tax breaks

$283.2 million – tax exemption for qualified machinery purchases

$212.6 million – mega jobs tax credits for new positions created

About $200 million – Road improvements including new I-16 interchange

$175.6 million – water and sewer upgrades

$62.5 million – for a Quick Start training center, plus $24.5 million more for operations

$50 million – project development grant

Sources: State documents and officials

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.