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25 May 2022

Hyundai bites the EV bullet, adds US factory to Korea and Indonesia

South Korean car maker Hyundai is not one of the largest car groups in the world, but even so if you include its Kia subsidiary it is on track to sell 3.6 million or so cars this year, close  to its 2019 record when it sold 4.4 million units, but down on last year’s (2021) figures.

But so far only 5% of its global sales have been EVs, and this week it set out to change what has been a “lukewarm” adoption of EVs, to one that embraces it more aggressively – it has agreed a close to $6 billion plan to build a car factory for EVs in Georgia in the US, and says it will spend $17 billion between now and 2030 rejuvenating its product line with 17 new battery electric models.

In March it completed its first Hyundai Motor manufacturing plant in Indonesia, where it will make 250,000 battery electric vehicles for Southeast Asia. There is currently virtually no-demand for BEVs in Indonesia, but workers in poorer countries often get their first ideas about EVs from their workplace. This factory will make the well-established IONIQ 5, and it will go on to produce the CRETA SUV and other EV models.

Hyundai will have been offered great terms from the Indonesian government as it has promised this will be Hyundai’s manufacturing center for all Southeast Asian markets, not counting its home market of South Korea.

But the US factory was something of a surprise and it said it would make 3.23 million EV cars globally by 2030, which by today’s standards is most of the cars it makes. It says only 45% of them will be made in South Korea. It looks like 10% of these will be made in the US.

Looking at Hyundai numbers it is one of those rare companies where it home market is roughly 10% of its global sales – making it truly international in nature.

The deal in Georgia is to build a factory in Bryan County, starting in 2023 and costing $5.54 billion and beginning commercial deliveries in 1H 2025 at an annual run rate of 300,000 units.

Rethink Energy predicted in January 2020 that one of the US majors (it was General Motors) would break cover and run for the EV market shortly after Joe Biden took office, and since then each car maker that had previously been resistant to EVs has come out with plan after plan, and Hyundai was one of the standouts for not having done this sooner. It will certainly have had trouble securing its battery supply chain, which is perhaps why it was not done a year earlier.

The company has chosen a dedicated 2,923-acre site in Bryan County Georgia, with immediate access to I-95 and I-16 highways which creates easy access to 250 major metro areas. West Point, Georgia is already home to the Group’s Kia manufacturing hub in the US.

Georgia is the Southeastern leader for EV registration per 1,000 registered automobiles and Georgia is ahead of most states in publicly available EV charging stations. The factory should create about 8,100 new direct and indirect jobs the company said.