Hyundai is reportedly rushing the construction of its $7.6 billion electric vehicle and battery production facility due to the EV tax incentives tied to the Inflation Reduction Act (IRA).
The South Korean automaker has been moving fast to produce EVs in the U.S. since President Joe Biden passed the Inflation Reduction Act. The IRA rewards domestic EV and battery production, prompting foreign car makers to establish roots in North America or any country with a free trade agreement with the U.S.
Hyundai, which includes the Kia and Genesis brands, said the IRA might be unfair to automakers that import EVs and batteries from outside North America. The IRA provides up to $7,500 in tax credits for vehicles and batteries made in North America.
Jose Munoz, Hyundai’s president and global COO, shared some of the company’s sales and lease figures after signing a partnership with Georgia Tech. Munoz’s presentation revealed the Hyundai group sold or leased the second-most EVs in the U.S. in the first half of 2023, only behind Tesla.
Hyundai still receives some benefits from the IRA, which does provide tax credits for leased EVs, regardless of the country that produced that vehicle. However, the South Korean company admitted the IRA is pushing it to set up production lines in North America faster.
“What we decided is to double down,” Munoz said. “We try to accelerate as much as possible the project. And we are confident that the original date of January 2025 would be probably pulled ahead, maybe three months or so. If we can, even more.”
Hyundai initially aims to assemble 300,000 EVs annually at the Georgia plant. It has partnered with South Korean battery supplier LG Energy Solution (LGES) to produce cells at the Georgia plant, qualifying its EVs for more tax incentives under the IRA. LGES and Hyundai increased their investment in the Georgia plant by $2 billion to increase its battery cell production capacity.
“We would like to ensure that the sourcing of the batteries is 100% USA to comply with the IRA,” Munoz said, adding the increased investment would also make sure Hyundai and LG use “the best possible technology” to make batteries.
Abby Andrews