Battery pact answers big question for EV plant
When Hyundai Motor Group announced audacious plans a year ago to build a sprawling electric vehicle plant on 2,200 acres near the Georgia coast, the Korean giant said on-site battery manufacturing with a then-unnamed partner would be a vital component of its U.S. supply chain.
Last week, Hyundai finally answered how it would develop the batteries needed to power the hundreds of thousands of plug-in Genesis, Hyundai and Kia models that are expected to roll off the future Bryan County assembly line each year. Hyundai late Thursday announced a partnership with fellow Korean conglomerate LG Energy Solutions to make 300,000 EV battery packs a year at the future Metaplant.
The Hyundai-LG pact helps spread the cost and risk of the multibillion venture and cements Hyundai’s ambitious timeline to begin building its electrified fleet near Savannah in 2025.
“Two strong leaders in the auto and battery industries have joined hands, and together we are ready to drive the EV transition in America,” Youngsoo Kwon, CEO of LG Energy Solutions, said in a news release.
The partnership, valued at $4.3 billion, represents nearly 80% of the total $5.54 billion investment Hyundai announced last year. The 3,000 battery manufacturing jobs, meanwhile, represent more than one-third of the 8,100 jobs that Hyundai has said the plant it will bring to Georgia.
The Metaplant is the state’s largest ever economic development project. Combined with the $5 billion Rivian EV plant east of Atlanta, and dozens of related suppliers scattered across the state, Georgia has positioned itself as one of the biggest players in the evolving domestic EV ecosystem.
Timothy Lieuwen, the executive director of Georgia Tech’s Strategic Energy Institute, said the Metaplant’s progression helps supercharge the state’s EV momentum.
“There’s going to be a lot of EVs built, a lot of batteries made and a lot of hydrogen produced,” he said. “The way that the state of Georgia is increasingly going to be the point of the spear for where that’s happening is really exciting.”
‘TRANSFORMING AN ENTIRE INDUSTRY’
The auto industry is rapidly moving to electrification. The success of Tesla proved EVs could have mainstream appeal, and existing automakers and upstarts have sunk billions into factories in the years since.
Georgia landed its first EV battery plant from SK Innovation several years ago. Former Gov. Nathan Deal and Gov. Brian Kemp have each made recruiting the EV sector a top jobs and investment priority. Georgia landed Rivian in December 2021 and Hyundai six months later.
Since 2020, EV makers and their suppliers have announced more than 40 projects totaling more than 28,000 announced jobs and $22.7 billion in anticipated investment, according to Kemp’s office. In the case of Hyundai, state and local governments offered the company some $1.8 billion in incentives to build the Metaplant, a figure that will not change with last week’s LG announcement.
President Joe Biden, meanwhile, committed to supercharging domestic EV development and charging infrastructure during his bid for president in 2020 and through a pair of landmark federal laws passed during his first term. One of them, the climate and health bill known as the Inflation Reduction Act, earmarked billions to support EV manufacturing and adoption. It was being debated in fits and starts as state leaders negotiated to land Hyundai and was passed into law about three months after Hyundai announced its Metaplant.
Kevin Ketels, an assistant professor of global supply chain management at Wayne State University in Detroit, said federal efforts, namely Biden’s climate law, are prompting a tsunami of EV investment.
“If all of these things fall in line, we will have a very strong end-to-end domestic battery supply chain that will free us from the politics of fossil fuels,” he said. “It’s transforming an entire industry. This is pretty unique in modern manufacturing to see the transformation of an industry this fast, this large and this complex.”
In addition to the Metaplant, Hyundai is developing another major battery plant in Georgia in Bartow County, a partnership with a subsidiary of fellow Korean conglomerate SK Innovation.
GREASING THE WHEEL
Transportation produces more greenhouse gas emissions in the U.S. than any other sector of the economy.
Since EVs do not produce tailpipe emissions on the road, both scientists and Biden’s administration say their adoption is critical to limiting global warming.
Washington is using both carrots and sticks to get more EVs on the road.
Last month, the federal Environmental Protection Agency proposed the strictest-ever emissions standards for lightduty vehicles and trucks which, if finalized, would likely ensure that two-thirds of all new cars sold by 2032 are electric. The Inflation Reduction Act also offers a $7,500 tax credit for consumers that buy EVs. New stipulations, however, require EVs be assembled in the U.S. and source a certain amount of their battery components domestically or from North American trade partners.
But right now, not all EVs sold in the U.S. are eligible. Hyundai does not currently manufacture any EVs in the U.S. and its cars do not qualify for therevised federal credit. (Previously, its cars had been eligible. Ones built in Georgia will regain eligibility.)
The exclusion of those vehicles has become a major point of contention between Kemp and Biden allies.
On Friday morning, U.S. Sen. Jon Ossoff said the HyundaiLG announcement was another sign of the effect of the climate and law. The bill received no Republican support with Ossoff and fellow Georgia Democrat, Sen. Raphael Warnock, casting deciding votes.
“We see through what’s happening in Georgia … that these incentives are indeed, attracting jobs and investment to the Peach State and other states across the country are also benefiting,” Ossoff said.
Kemp’s office argues federal policies have little to do with Metaplant-related projects, since it was announced before the IRA become law.
Kemp, in Israel last week with a Georgia trade delegation, credited “the strong partnerships carefully built on the state level” with Hyundai and LG. He called the announcement “the latest milestone in Georgia’s path to becoming the EV capital of the nation.”