Hyundai Prepares To Break Ground On $5.5 Billion Electric Vehicle Plant In Georgia

Oct. 17, 2022 2:56 PM ET by Sebastian Cenizo Industry News / 1 Comment

Hyundai is pushing ahead to try to get EV production in the US on track.

Hyundai announced on Friday that it will commence construction of its $5.5 billion electric vehicle and battery manufacturing plant in Savannah, Georgia, on October 25, revealing that it expects to be able to begin commercial production of EVs at the plant in the first half of 2025. The "metaplant" is intended to produce 300,000 vehicles every year as part of the Hyundai Group's commitment to investing $10 billion by 2025 "to foster future mobility in the US," said the automaker.

This is positive news, as there was doubt that the plant would go ahead at all following the introduction of the Inflation Reduction Act and its exclusionary policies towards foreign automakers.

Earlier this month, Georgia Senator Reverend Raphael Warnock introduced the Affordable Electric Vehicles for America Act, which was proposed to create a phase-in period for automakers like Hyundai so that they could still qualify for the IRA's tax credits. However, the debate over the IRA is still not over.

European Union representatives recently pointed out that Europe does not impose the same restrictions on American EVs that America does on foreign EVs. Japan has also questioned the legality of the Act, given that it seems to go against multilateral trade agreements that the US has signed as part of the World Trade Organization.

There has been a lot of conversation surrounding the Act and how it can be improved, but the good news is that both foreign and domestic representatives are engaged in talks to find a way forward. Hyundai's decision to go ahead with the construction of its US plant indicates that it is already too committed to the project to consider canceling the plant. Alternatively, it could be seen as an indication that the automaker has a positive outlook on how the IRA may be adjusted to suit foreign automakers. If this new plant helps make the Ioniq 5 and other electric products more attractive to American buyers, everyone wins, but we still have a long way to go before a large spread of vehicles is eligible for tax credits.