Hyundai asks US state of Georgia for more incentives

Hyundai Motor Co. discussed additional incentives on its planned electric vehicle plant in Georgia with the US state's government as the leading South Korean automaker is seeking measures to counter Washington’s decision to remove tax credits for EVs made outside of North America.

Hyundai Motor Group Chairman Chung Euisun visited Georgia and met state officials to talk about extra benefits before it completes the projected factory in Bryan County, on the Georgia coast just southwest of Savannah, according to industry sources on Monday.

“As far as I know, they discussed how the Georgia government can compensate Hyundai for not receiving the federal tax credit of $7,500 per unit,” said one of the sources with direct knowledge of the matter.

In May, the state authority and the group agreed on incentives of some $1.6 billion, including tax breaks, as Hyundai has decided to build its first dedicated EV and battery manufacturing facilities in Georgia.

The automaker is currently in talks with LG Energy Solution Ltd., a major global battery maker, on a joint US EV cell factory likely to be established in the state.

MEASURES TO COUNTER IRA

The results of the negotiations between Hyundai and the Georgia state government could lead to a revision in the automotive group's EV production plans, industry sources said.

The company was scheduled to break ground for the EV plant in the first half of 2023. Before the completion of the factory, Hyundai had planned to start producing the Genesis Electrified GV70 in the US from this coming December by adding an EV production line to its Alabama facility. Its affiliate Kia Corp. had also decided to manufacture the EV9, a large-size electric sport utility vehicle, at its assembly plant in West Point, Georgia.

Chairman Chung was known to have visited major markets in the US such as New York and Los Angeles to discuss negotiation strategies and check those markets before heading to Georgia, sources said.

“The chairman started actions in person to deal with the IRA crisis after the group rose to the No. 2 spot in the US EV market during the first half,” said one of the sources, referring to the Inflation Reduction Act.

South Korea’s government also began taking measures. The country dispatched a delegation composed of senior officials from the trade, finance and foreign ministries to convey the government and industry worries about the law’s implementation.

The delegation plans to discuss supplementary measures with key authorities such as the US Trade Representative and the Department of the Treasury and the Department of Commerce in Washington from Aug. 29 to Aug. 31.

Write to Hyung-Kyu Kim and Il-Gue Kim at khk@hankyung.com
Jongwoo Cheon edited this article.