Hyundai to build EVs at US plant; Electrified GV70 to roll out in Dec.

NEW YORK – Hyundai Motor Co. is spending $300 million to add an electric vehicle production line to its manufacturing plant in Alabama as the top South Korean automaker is striving to expand its footprint in the fast-growing EV segment in the US.

Hyundai Motor Manufacturing Alabama LLC (HMMA), located in Montgomery, will start producing the Electrified GV70, the latest model under its standalone premium brand Genesis, in December for delivery to customers in January next year, the company said on Wednesday.

The company will also manufacture a hybrid version of the Santa Fe SUV at the plant from this October.

The addition of the Electrified GV70 and the Santa Fe Hybrid marks the beginning of Hyundai’s electric vehicle production in the US. The company has so far produced the vehicles at its main plant in Korea and exported them to the North American market.

“Hyundai Motor is taking its first steps toward bringing electric vehicle production to the United States,” Ernie Kim, chief executive of HMMA, said after signing a project agreement with Alabama Governor Kay Ivey.

HMMA, Hyundai’s first assembly and manufacturing plant in the US, was established in 2005 with $1.1 billion in investment. With some 3,100 workers and an annual production capacity of 370,000 cars, the plant currently assembles Sonata and Elantra sedans, Santa Fe and Tucson SUVs, and the Santa Cruz Sport Adventure Vehicle.

The latest assembly line addition will also create 200 new jobs, according to Hyundai.

“Hyundai’s new growth plans in Montgomery will help prepare the state’s auto industry for the EV revolution while also aligning with our strategic initiatives such as Drive Electric Alabama,” said Governor Ivey.

The Electrified GV70 is a luxury electric SUV that boasts a bold design, new driver-oriented technologies and powerful vehicle performance. The Santa Fe Hybrid matches the SUV’s versatility with fuel efficiency.

NEW EV PLANT UNDER CONSIDERATION

Hyundai Motor Group, which owns Hyundai Motor and its sister firm Kia Corp., is also considering building another plant dedicated to the manufacture of electric vehicles in the US.

The group is currently in talks with government officials in Tennessee and South Carolina for the construction of the EV plant, according to industry sources.

The move comes as the US government is strengthening its policy efforts to roll out more EVs in the country, while forcing global automakers operating in the US to increase the portion of auto parts made within the country.

In August last year, US President Joe Biden signed an executive order to ensure at least half of US vehicle sales by 2030 are EVs. As part of the goal, the government plans to offer higher subsidies for zero-emission models assembled in the US and impose heavier penalties on carmakers that fail to meet toughened environmental regulations.

HYUNDAI TO REBRAND IN US AS PREMIUM AUTOMAKER

According to investment bank Goldman Sachs, EVs and plug-in hybrids will account for 55% of all new cars sold in the US by 2030, up sharply from 6% in 2021. The ratio is forecast to rise further to 80% by 2040.

Hyundai has said it plans to sell half of its cars in the US with eco-friendly vehicles by 2030 by increasing sales of electric models.

In May 2021, Hyundai Motor Group said it will pump $7.4 billion into its US operations by 2025, with its focus on future mobility segments, including electric vehicles, urban air mobility, autonomous driving and robotics.

In the US, Hyundai aims to position itself as a premium brand with an increased rollout of Genesis models.

Last year, the company launched the GV80 sedan and the GV80 SUV as well as the GV70 SUV in the US.

Previously, Hyundai sold Genesis cars via the Hyundai dealership network, but recently it began building a separate Genesis sales network across the US to enhance the luxury model’s brand recognition among American consumers.

“The local production of the Electrified GV70 will help Hyundai get ahead of its Japanese rivals in the US market,” said DAOL Investment & Securities analyst Yoo Ji-woong.

Write to Il-Gue Kim and Hyung-Kyu Kim at Black0419@hankyung.com
In-Soo Nam edited this article.