A high-ranking official of the U.S. state of Georgia visited Korea to discuss moving up the construction schedule for Hyundai Motor Group’s electric vehicle plant. If the plant starts operation earlier, Hyundai Motor Group will be able to receive tax benefits from the U.S. government earlier.
Pat Wilson, commissioner of the Georgia Department of Economic Development (GDEcD), and Brittany Young, chief operating officer of the same organization, recently visited Korea and met with key executives of Hyundai Motor Group, including chairman Chung Eui-sun, at the group’s headquarters in Yangjae-dong, Seocho-gu, Seoul.
They listened to a briefing on the manufacturing facilities for Kia’s EV6 and compared the IONIQ 5 with the EV6 in person. The U.S. state of Georgia is in talks with other Korean companies such as SK, Hanwha, and Kumho to attract their investments. SKC decided to build a glass substrate plant for semiconductor packaging this year. Kumho Tire is operating a plant in Georgia that was completed in 2016.
At the meeting with the U.S. officials, Hyundai Motor reportedly proposed a plan to advance the construction of its electric vehicle plant in Georgia to some time in 2022. The plant had been slated for completion in 2025. If construction starts this year, it will be able to go live in the second half of 2024 at the earliest.
All electric vehicles currently sold by Hyundai Motor Group are produced in Korea and then exported to the United States, so they are not eligible for tax benefits of US$7,500 per unit under the Inflation Reduction Act (IRA).
Some observers say that the IRA will have a devastating impact on Hyundai Motor Group’s electric vehicle sales in the United States. The Korean automaker sold an average of 1,300 units per week in the United States in the first half. The IONIQ 5 has been on an upward sales curve recently, as it was honored as the electric vehicle of the year by American automobile magazines, beating out American and European models.
However, some analysts say that if Hyundai Motor Group introduces a flexible installment plan and other discount systems such as charging cards for U.S. consumers, it may be able to prevent a steep sales drop. The electric vehicle market is on the uptick in the United States as a whole. Therefore, Hyundai Motor Group may secure an advantageous position in the long run.