Georgia could see more than $10 billion invested in construction of two new auto assembly plants. South Korean automaker Hyundai Motor Group confirmed May 20 its intention to build an electric vehicle factory near Savannah, valued at $5.5 billion, with startup Rivian Automotive Inc. recently announcing a plan to build a $5-billion electric pick-up truck plant east of Atlanta.
The former will be the state's largest ever economic development project, said Gov. Brian Kemp, while the latter involves a $1.5-billion state incentive that is the largest it has provided.
The Hyundai announcement coincided with President Joe Biden’s trip to South Korea May 20-24.
At an appearance in Seoul on May 22 with Biden, Hyundai Motor Group CEO Jaehoon Chang said the firm will employ at least 8,100 workers at the plant, which will be its first U.S. facility to produce electric vehicles, which also will manufacture EV batteries. “This new, high tech EV plant represents the future of our business,” he said. The company has two existing US auto plants, one in Georgia and one in Mississippi
In a statement, Biden said project construction would start early next year, and in 2025, the plant would begin producing up to 300,000 vehicles per year. The company and state officials said suppliers could invest an additional $1 billion in the area.
The firm did not disclose names of firms to be involved in plant design and construction.
Some media speculated the plant would not involve union workers because Georgia is a "right to work" state. That workforce issue was not addressed directly by Hyundai or Biden, but the President said "Hyundai and any company investing in the [US] would benefit greatly from entering into partnerships with some of the most highly skilled, dedicated, and engaged workers in the world ... and that is, American union members." He added that "every venture to manufacture electric vehicles and electric vehicle batteries would be made stronger" by a union collective bargaining relationship.
The company had said in 2021 that it plans to invest $7.5 billion in the U.S. in EV manufacturing and charging stations but did not elaborate. Plans for the new plant were first noted by the Atlanta Journal-Constitution and attributed to state officials, but later were confirmed by Bloomberg and Reuters, which quoted government sources not authorized to speak.
Georgia's $1.5-billion incentive package offered to Rivian, the Irvine, Calif., EV startup with one plant in Illinois, is the largest the state has ever offered, said its Economic Development Commissioner Pat Wilson.
The package includes a mix of discretionary funding, tax credits and local incentives along with a requirement that the company invest 80% of its investment, including 7,500 jobs, by the end of 2028. EV battery builder SK Innovations already is spending $2.6 billion to build two plants in Georgia.
Rivian said in December that construction would begin this summer with operations set for 2024. Those dates still hold, the company told ENR, but it would not release names of firms selected to design and build the project.
Following local opposition, the state in February assumed management of the 2,000-acre project, which officials said enabled them to bypass local rezoning hearings and “streamline” the development process.
Rivian also said it is enlarging its plant in Normal, Ill., adding 623,000 sq ft for a total of about 4 million sq ft.
The firm launched production of its electric trucks in September 2021, before raising $13.7 billion through an initial public offering in November.
In its latest quarter results announced May 11, Rivian reported $95 million in revenue, below analysts' estimates, and a loss of $1.6 billion, up from a loss of $414 million in the same quarter last year, with the firm citing supply chain issues, higher battery production costs and a recall of 500 trucks due to an air bag defect.
Rivian CEO R.J. Scaringe told analysts the firm would overcome the production obstacles. It then cited 90,000 preorders for its R1-series truck and SUVs as of May 9 as strong demand indicators. But Scaringe also reaffirmed the company would halve its annual production target to 25,000.
Amazon and Ford Motor Co. remain major stockholders, though the latter sold off 8 million shares on May 10.
Rivian shares fell 9.6% on May 11, but rose 5% in extended trading. Baird Equity Research analysts said the firm "is primed to emerge" into a major EV manufacturer, citing its still strong balance sheet and Amazon link.
This file was updated on May 22 to reflect confirmation of the Hyundai plant project in Georgia and comments from President Joe Biden.