Automotive powerhouse Hyundai announced in May a multi-billion investment to produce electric vehicles (EVs) and batteries in Georgia, thus boosting the US state’s credentials as a major recipient of big ticket investment in e-mobility projects.
Hyundai has allocated $5.54bn to the facility in Bryan County, Georgia, the company said in a statement on May 21. The company will break ground in January 2023 and complete construction by 2025, creating around 8000 new jobs, the company said.
This project is the biggest foreign direct investment (FDI) project ever announced in the EV space, according to data by cross border investment monitor fDi Markets. Georgia now features at the top of the ranking of sub-national territories that have become hotspots for capital intensive e-mobility investment.
Overall, the state has received a total of $12.4bn in FDI and US interstate investment between 2003 and April 2022. Neighbouring Tennessee follows at $10.7bn, while Chinese Jiangsu has attracted $8.7bn so far.
“The automotive industry is going through a drastic change in this move toward electrification,” Pat Wilson, commissioner of the Georgia Department of Economic Development, told fDi. “This is a project that not only is important for today, but really important for the future.”
Asian and European automotive producers have developed major manufacturing capabilities in southern US states for decades, attracted by convenient locations, costs and labour laws. The transition to electric mobility gives them new opportunities, but also faces them with major challenges.
“The biggest issue is that the supply chain doesn’t exist right now,” Mr Wilson told fDi in December 2021.
However, suppliers are already moving in to cater to the needs of tier-1 producers, such as Hyundai, that plan to develop big EV capacities in the US. Aurubis, a German largest copper producer, invested $340m into a facility to produce the materials found in lithium-ion batteries in Augusta, Georgia, last November. SK Innovation has invested $2.6bn in building two EV battery facilities in Commerce, Georgia. Another Korean car maker, Kia (which is owned by Hyundai), operates a plant for its own EV product lines, EV6 and the Niro EV in West Point, Georgia.
“So we’ve seen really the beginning of what I think is going to be a wave of supply chain projects to support electrification of the automotive industry. And I think over the next five years that is going to bloom and you’ll see a really massive shift of projects that really are focused on electrification,” Mr Wilson told fDi.
The EV and battery manufacturing facility in Georgia is part of Hyundai’s plans to continue to invest in the US until 2025, according to the remarks by president Joe Biden on May 22. Hyundai is investing more than $10bn into the country — an increase from the $7.4bn initially announced in 2021.
“The group will strengthen its partnership with US public and private entities to offer innovative products and mobility solutions,” Euisun Chung, executive chair of Hyundai Motor Group, said following his meeting with Mr Biden on May 22.
The company is planning to increase investment for mobility electrification and seek new business opportunities with local partners in the US.