Money Talks: The Electric Vehicle Revolution Trumps Red State Politics
Oh the irony, it burns. The US state of Georgia falls into the red side of the political spectrum, except when the topic turns to attracting clean tech manufacturers. The latest news comes from Hyundai, which has just announced that its popular Ioniq 5 SUV will be the first electric vehicle to roll off the production line of the company’s new $7.5 billion manufacturing campus in Georgia.
The Hyundai Ioniq 5 Is A Popular Electric Vehicle…
It remains to be seen whether or not Hyundai can nudge aside the current ruler of the electric vehicle roost in the US zero emission mobility market, that being Tesla. Nevertheless, the Ioniq series has been a hit in the US and globally.
In particular, the Ioniq 5 SUV has pulled the rug out from under the naysayers of doom who have cast doubt on the electric vehicle market. There were some glitches in the US market last year and elsewhere around the world, but EV sales began to pick up in January 2024 and the momentum has continued.
Globally, the Ioniq 5 is Exhibit A in the rebound of the electric vehicle market. “The Hyundai IONIQ 5’s sales numbers prove its popularity,” Hyundai stated in a press release dated June 18. “It is Hyundai’s highest volume EV, with sales up 43% so far in 2024, and an increase of 82% in May alone,” Hyundai added.
…And It Will Be Made In The USA
Anyone (raises hand) who loves small cars and tiny trucks may be disappointed by the choice of an SUV as Hyundai’s first US-made electric vehicle, but the market has spoken and it likes SUVs.
In the June 18 announcement, Hyundai affirmed that its new Hyundai Motor Group Metaplant America will host the production of the 2025 Ioniq 5. That may come as surprise, considering that the 2025 model hasn’t had an official unveiling in North America yet. Nevertheless, Hyundai is jumping its own gun.
“While the 2025 model of the popular all-electric SUV has yet to be officially unveiled for North America, HMGMA is currently training and preparing to begin production in the fourth quarter of this year,” Hyundai explained.
“The new plant will produce all trim lines (except IONIQ 5 N) and will eventually be the sole facility building IONIQ 5 models for the U.S. market,” the company added.
Follow The Money To The Electric Vehicle Revolution
The Metaplant first came to CleanTechnica’s attention in 2022, as the nexus for Hyundai’s growing EV supply chain web in Georgia.
In the new HMGMA announcement, Hyundai noted that it is investing $7.59 billion to develop the new campus, located in Ellabell, with the expectation of creating 8,500 new direct jobs. “Additionally, Hyundai and SK On are building a $5 billion EV battery cell plant in Bartow County, Georgia that will employ 3,500 workers,” Hyundai also stated.
Hyundai also drew attention to a study from the Center for Automotive Research, which calculated that Hyundai’s electric vehicle investments in Georgia will create almost 40,000 jobs, attended by an annual figure for individual earnings of an estimated $4.6 billion.
And, More Money
Georgia is just one of many US states where elected officials have been throwing rhetorical, legislative, and/or legal bombs against ESG (Environment, Social, Governance) investing principles, even while their own economic development agencies invest millions of public dollars to attract new clean tech businesses that aim to kill off fossil fuels (see more ESG background here).
Hyundai is a case in point. “The state of Georgia and local governments are on track to give $2.1 billion in tax breaks and other incentives to Hyundai Motor Group after the South Korean automaker and a partner announced last month that it will invest an additional $2 billion at an electric vehicle complex it’s building in Georgia,” Associated Press reported last September.
“Associated Press calculations show projected incentives will rise by more than $290 million from the $1.8 billion deal originally announced last year. Only $2.75 million of that represents additional cash from the state. The rest will come from increases in tax breaks,” AP added.
The Electric Vehicle Capital Of The Nation
Even without the financial incentives, Georgia has two assets attractive to manufacturers. One is a longstanding school-to-factory worker training and hiring program. The other is Georgia’s status as a “right to work” state under regulations passed in 1947. That makes it difficult for workers to unionize, which means that employers can enjoy a more compliant workforce. Automakers in Georgia have enjoyed that advantage for decades. Now the torch has been passed to electric vehicles, as indicated by the Georgia Department of Economic Development.
“Building on the assets that make the state’s automotive industry successful, Georgia is rapidly developing as the capital of EV manufacturing for the nation,” enthuses GDEcD.
In addition to Hyundai’s electric vehicle venture, GDEcD also notes that the Kia facility in West Point will begin making the company’s new EV9 model this year.
Another electric vehicle maker on the GDEcD list is Rivian, which announced plans for a $5 billion factory in Georgia back in 2021. That project got well into the site preparation phase before Rivian switched gears to focus on its EV production facility in Illinois, though the company has reportedly characterized the snag as a temporary one.
The Georgia Electric Vehicle Ecosystem Is Growing: Thanks, Inflation Reduction Act
GDEcD is also targeting the whole electric vehicle ecosystem. “Providing the full electric vehicle supply chain is critical to a truly sustainable future, and Georgia is rapidly expanding across multiple segments: cathode and anode manufacturing, chemical and mineral solutions, battery manufacturing, metals and aluminum manufacturing, and battery recycling,” the agency notes.
In the latest development on that score, earlier this year the energy storage startup Freyr Battery Inc. announced that it is relocating its home base back to the US from Europe. The company cited “global tax developments and U.S. incentive programs for battery manufacturers, considering recent changes in U.S. tax laws and federal incentive programs” as one key advantage of the move.
The redomiciling, as it is called, will also help facilitate the construction of Freyr’s new Giga America factory in Coweta County, Georgia. Freyr announced the site selection in 2022.
“The initial phase of Giga America is planned to be a cell production module of approximately 34 GWh based on the next-generation of 24M’s U.S.-based SemiSolidTM production platform at an initial projected capital cost of $1.7 billion,” Freyr explained in a press statement.
The company also name-checked the Inflation Reduction Act as a key element in support of the project, stating that “with the recent passage of the Inflation Reduction Act, we expect U.S. demand for ESS, passenger EV and other electric mobility applications to grow rapidly over the next decade.”
“The total package of financial incentives for Giga America includes robust assistance collectively provided by The State of Georgia and Coweta County in addition to the expected production tax credits associated with the recently passed Inflation Reduction Act,” Freyr added.
That may be news to the Georgia state legislators who have been working to pass bills aimed at blocking financial firms that ascribe to ESG investing principles.
Perhaps they didn’t get the electric vehicle memo. Be that as it may, in a corporate update earlier this year Freyr indicated that plans for the Giga America battery factory are moving forward.
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Photo (cropped): Hyundai plans to manufacture the Ioniq 5 electric SUV in Georgia, red state politics or not (courtesy of Hyundai).
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