The South Korean auto giant has deep ties to Georgia. Kia announced its first U.S. plant in West Point in 2006. At the time, the deal ended a dry spell as foreign automakers had bypassed Georgia again and again for neighboring states.
Now combined with Rivian, Georgia could boast a pair of EV auto projects within six months, bringing with them combined promises of thousands of manufacturing jobs and spinoffs from suppliers. The deals, respectively, would rank as the two largest ever recruited by the state.
A deal could be formally announced before the May 24 GOP primary when Kemp faces a tough primary challenge.
Reuters reported the Hyundai Motor Group investment coincides with President Joe Biden’s push to electrify the federal fleet and encourage more EV production and green jobs in the U.S. Biden is expected to travel to Asia for bilateral meetings with the leaders of South Korea and Japan, respectively, from May 20-24. The missions are expected to focus on economic cooperation and security.
States covet auto factories because they bring billions in investment, thousands of middle-class jobs, and the likelihood of spinoff jobs from a network of suppliers. Kia already has a web of suppliers in Georgia that support its existing factory in West Point, where it builds gas-powered Sorento and Telluride SUVs and K5 sedans.
Though EVs make up about 3% of U.S. auto sales, that is expected to grow exponentially as fuel and emissions standards tighten and costs to build EVs drop. Kemp and his predecessor, Gov. Nathan Deal, have targeted the sector aggressively.
In December, Rivian confirmed plans to build a $5 billion factory where it will assemble electric trucks, SUVs, delivery vans and batteries at a site straddling Walton and Morgan counties. Rivian plans to employ 7,500 at the site along I-20 about an hour east of Atlanta.
Under Deal, the state recruited an EV battery plant from South Korean conglomerate SK Innovation in Jackson County, about an hour northeast of Atlanta along I-85. SK has agreements to build batteries for Ford and Volkswagen.
The incentive package that state officials would offer to land the Hyundai Motor Group expansion is not immediately clear, but it could rival the record-breaking $1.5 billion bounty of perks negotiated for Rivian, which includes free land, grants, tax credits, a workforce training center and infrastructure improvements.
The inducements drew criticism from watchdogs and local residents who criticized the package as too generous, though economic development officials framed it as a necessary to land a transformative project.
High-tech deals, like Wisconsin’s grand dreams for Foxconn a few years ago, don’t always succeed.
Georgia would be committing public resources to two major automotive manufacturers in hopes they can create thousands of manufacturing jobs, transform rural stretches of the state and keep the brainpower of graduates from top Georgia colleges in-state.
Conventional automakers like Hyundai, Kia, Toyota, Ford and General Motors are wrestling with EV giant Tesla and a slew of well-financed upstarts such as Rivian and Lucid to perfect plug-in vehicles and claim market share as analysts expect consumers to increasingly bypass vehicles powered by internal combustion engines for battery-powered ones.
Last year, Hyundai Motor Group, which includes the Hyundai and Kia brands, announced plans to invest $7.4 billion in the U.S. by 2025 to expand manufacturing capabilities and to boost production of electric vehicles and other mobility technologies.
Hyundai operates an assembly plant near Montgomery, Alabama, where Automotive News recently reported the company will build an electric crossover for its luxury Genesis brand.
Prime real estate
Kia announced plans in 2006 to build its first U.S. factory in West Point near the Alabama border. In that time, West Point factory has grown to employ more than 2,700 and the company has drawn dozens of suppliers to the state, which collective employ thousands more.
The plant opened in 2009, when Georgia was still mired in the Great Recession and as West Point was still reeling from losses to the textile industry.
The factory has been a roaring success for Kia and runs 24 hours a day with three shifts, producing 340,000 vehicles a year, according to the company. In 2021, Kia sold more than 700,000 vehicles in the U.S., up nearly 20% from the year before, according to data from Cox Automotive.
Vehicles from Hyundai Motor Group, which includes Kia, Hyundai and Genesis, made up nearly 10% of all automobiles sold in the U.S. last year, ranking fifth among major manufacturers, just ahead of Honda, according to Cox Automotive, which like the AJC, is a division of Cox Enterprises.
It was not immediately clear which models might be assembled at this new Georgia plant.
Hyundai sells electric Ioniq 5 and Kona crossovers and hybrid versions of its Tucson and Santa Fe crossovers.
Kia currently produces two fully-electric vehicles — the EV6 crossover and a Niro EV based on the conventional model. Kia also sells hybrid versions of its Sorento, Niro and Sportage crossovers.
Kia is expected to continue operating its current West Point facility, one person familiar with the matter told the AJC.
The more than 2,200-acre South Georgia site under negotiations for the new plant, near the unincorporated town of Ellabell, is a sprawling tract the state once pitched to several automakers, including Rivian, Volvo and Jaguar Land Rover.
Rivian instead chose a site between the towns of Social Circle and Rutledge. But the Bryan County megasite has been seen as a tempting property for an EV factory or other industrial users.
The state of Georgia paid $61 million to purchase the undeveloped property last July.
State Economic Development Commissioner Pat Wilson, Georgia’s top recruiter, told the AJC last year the Bryan County property was worth the high price because its combination of strengths is found nowhere else in the state.
The flat terrain is free of rocky soil and it enjoys direct connections by road and rail to the ports of Savannah and Brunswick.
A local joint development authority had the site under contract for some time before Georgia stepped in with grant funding to complete the sale.
Last year, Trip Tollison, CEO of the Savannah Economic Development Authority, told the AJC that numerous smaller industrial parks near the new megasite would be good locations for suppliers to a larger factory.
A 2022 rift
Georgia currently enjoys record-low unemployment. And much like Rivian, Hyundai Motor Group will be making a bet the state and supply its new plant with workers to keep its assembly lines humming.
Rivian plans to hire 7,500 workers at an average salary of $56,000, according to the incentive package it reached with the state. The deal with Rivian was valued at nearly $200,000 per job.
The Rivian project has faced intense local pushback from a grassroots network of nearby residents who say that Kemp and other state officials neglected to get buy-in from residents surrounding the area, about an hour east of Atlanta.
Kemp’s top Republican challenger, former U.S. Sen. David Perdue, has bashed Kemp over the deal and its lucrative incentive package. Kemp has touted the announcement as a seal of approval of his economic agenda ahead of the primary.
A note of disclosure
Cox Enterprises, owner of The Atlanta Journal-Constitution, owns about a 4% stake in Rivian and supplies services to the company. Sandy Schwartz, a Cox executive who oversees the AJC, is on Rivian’s board of directors and holds stock personally. He does not take part in the AJC’s coverage of Rivian.
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