Hyundai will begin construction on its first EV plant to retain US tax credit
And it’s official. Hyundai will break ground on its massive $5.5 billion electric vehicle factory in Bryan County, Georgia, on October 25. After several months of lobbying with US officials over EV tax credit changes in the recently passed climate law, the South Korean motor group is officially starting construction on its EV manufacturing plant.
According to a report from The Atlanta Journal-Constitution, Hyundai will meet with state and local leaders to start the 3,000-acre project, the most significant economic development project in Georgia’s history.
Hyundai initially announced plans for the $5.5 billion facility, its first dedicated EV plant, in May. The automaker entered into an agreement with the state of Georgia with plans to begin construction in early 2023.
However, since the Inflation Reduction Act was passed in August, Hyundai and South Korean Officials have publicly stated their concerns over the disproportionate effects it may have on automakers.
Before the bill was passed, Hyundai models (including the Hyundai IONIQ 5 and Kia EV6) qualified, but with strict new battery sourcing and assembly requirements, that would no longer be the case.
The climate bill was passed to renew US manufacturing capacity, support the transition to electric vehicles in the United States, and boost the economy (companies have invested almost $85 billion in EVs and battery tech since 2021).
A South Korean news agency reported last month that, to meet the criteria, Hyundai was considering speeding up its timeline and could begin construction by the end of 2022.
It seems the reports are accurate as Hyundai has announced its plans to begin construction later this month in a move to secure its EV tax credit. When can we expect the automaker’s electric models to qualify?
Will Hyundai EV models qualify for the tax credit?
Georgia Senator Reverend Warnock introduced a bill earlier this month that would allow automakers like Hyundai a grace period to build EVs in the United States.
The Affordable Electric Vehicles for America Act, as it’s called, would delay when the specific requirements would go into law until 2025. Although it has little chance of passing, it makes sense.
Hyundai has already agreed to invest significantly in US EV manufacturing, which is expected to create around 8,100 jobs. Furthermore, the Hyundai Group’s (Hyundai, Kia, Genesis) parts supplier said it would invest $1.3 to establish an EV components plant to expand its North American footprint further.
Why not include them in the tax credit to give them time while accelerating EV adoption in the United States?
Earlier this month reports out of South Korea suggested that President Biden has “expressed willingness” to continue discussions with leaders over foreign automakers qualifying for the US tax credit.
Hyundai is currently seeking a delay to the phase-in period for the newly passed US climate bill so its EV models can still qualify for the tax credit until its plant is operational, according to the AJC.
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