Hyundai Motor Plans On Building More Hybrids Inside North America

Matt Posky
by Matt Posky

Hyundai Motor reportedly plans on using preexisting investments slated for its new EV facility in Georgia to pivot toward hybrid vehicles, as all-electric models haven’t seen the kind of adoption rates that would warrant an entire factory — let alone the plant that will become its largest outside of South Korea.

This is despite over a decade of government subsidies trying to push the world toward battery powered transportation, much of which went directly to automakers as a way to help them cope with high development costs of novel electric powertrains. However, selling something few are buying isn’t a great business model — even if Western governments still plan on instituting emissions fines to punish automakers that don’t manage to comply.

News that Hyundai was considering shifting at least some of the production at its new EV facility in Georgia has been swirling since March.

Chief Operating Officer Jose Munoz made the announcement on Wednesday during a conference hosted by the Financial Times.

"I think we can handle [everything] within the current investment more or less,” he said.

From Reuters:

South Korea's Hyundai Motor Group, which houses Hyundai Motor and Kia, said it would invest $12.6 billion for new dedicated EV and battery manufacturing facilities in Georgia — its largest investment outside South Korea.
Munoz's comments come after the automaker said last month it planned to add equipment to build hybrid vehicles at the Georgia plant, which is set to start production in the second half of this year.
"Now we are at this pivotal point where we can decide if we're going to go full electric or if we should go for something else. My vote here is that we should go for something else in addition to electric," said Munoz, when asked about Hyundai's decision to add hybrids to the plant.

The most interesting aspect of this is that the state had roughly $2 billion in government incentives put in place to encourage Hyundai to build a factory within its borders. These kinds of deals are relatively common, with state and local governments simply trying to tempt companies to set up shop with the assumption that the subsequent investments will strengthen communities and gradually result in improved tax revenues. In fact, Georgia’s own investments were tied to how much Hyundai was willing to spend and managed to push the build from a $7.6-billion affair to one that’ll cost well over $12 billion to complete.

However, much of the relevant tax breaks and supplemental funding were tied to this being a production facility focused on all-electric vehicles. That's how the deal was sold, anyway. Building hybrids would seem to undermine the original terms slightly. But with the term "electric vehicle" being rather nebulous, hybrid vehicles (even if they aren’t of the plug-in variety) sometimes qualify. What Georgia is getting doesn’t appear to be exactly what it asked for. But the region undoubtedly still wants to see new assembly lines put into place to help bolster job growth and the local economy.

Munoz was quoted by Reuters as saying Hyundai Motor was preparing itself for "different scenarios", in regard to the U.S. Inflation Reduction Act that requires electric vehicles to be assembled inside North America to qualify for EV tax credits. This has also been pretty normal within the industry, with the assumption being that another Trump administration would basically see the aggressive electrification policies done away with. That would presumably include financial subsidies for automakers, leading to many taking a wait-and-see approach.

[Image: Hyundai]

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Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • SCE to AUX SCE to AUX on May 09, 2024

    " help bolster job growth and the local economy"

    An easy win for the politicians - the details won't matter.

    • that .. all that ^^ .. then in 2 years *blame them for leaving or firing people* when that same scumbag politician takes away the tax payer funded money were handing them to incentivize them to stay

  • Bd2 Bd2 on May 10, 2024

    While Hyundai has enough models that offer a hybrid variant, problem has been inadequate supply, so this should help address that.

    In particular, US production of PHEVs will make them eligible for the tax credit.

  • 3-On-The-Tree I don’t think Toyotas going down.
  • ToolGuy Random thoughts (bulleted list because it should work on this page):• Carlos Tavares is a very smart individual.• I get the sense that the western hemisphere portion of Stellantis was even more messed up than he originally believed (I have no data), which is why the plan (old plan, original plan) has taken longer than expected (longer than I expected).• All the OEMs who have taken a serious look at what is happening with EVs in China have had to take a step back and reassess (oversimplification: they were thinking mostly business-as-usual with some tweaks here and there, and now realize they have bigger issues, much bigger, really big).• You (dear TTAC reader) aren't ready to hear this yet, but the EV thing is a tsunami (the thing has already done the thing, just hasn't reached you yet). I hesitate to even tell you, but it is the truth.
  • ToolGuy ¶ I have kicked around doing an engine rebuild at some point (I never have on an automobile); right now my interest level in that is pretty low, say 2/5.¶ It could be interesting to do an engine swap at some point (also haven't done that), call that 2/5 as well.¶ Building a kit car would be interesting but a big commitment, let's say 1/5 realistically.¶ Frame-up restoration, very little interest, 1/5.¶ I have repainted a vehicle (down to bare metal) and that was interesting/engaging (didn't have the right facilities, but made it work, sort of lol).¶ Taking a vehicle which I like where the ICE has given out and converting it to EV sounds engaging and appealing. Would not do it anytime soon, maybe 3 to 5 years out. Current interest level 4/5.¶ Building my own car (from scratch) would have some significant hurdles. Unless I started my own car company, which might involve other hurdles. 😉
  • Rover Sig "Value" is what people perceive as its worth. What is the worth or value of an EV somebody creates out of a used car? People value different things, but for a vehicle, people generally ascribe worth in terms of reliability, maintainability, safety, appearance and style, utility (payload, range, etc.), convenience, operating cost, projected life, support network, etc. "Value for money" means how much worth would people think it had compared to competing vehicles on the market, in other words, would it be a good deal to buy one, compared to other vehicles one could get? Consider what price you would have to ask for it, including the parts and labor you put into it, because that would affect the “for the money” part of the “value for money” calculation. An indicator of whether people think an EV-built-in-a-used-car would provide "value for money" is the current level of demand for used cars turned into EVs. Are there a lot of people looking for these on the market? Or would building one just be a hobby? Repairing an existing EV, bringing it back into spec, might create better value for the money. Although demand for EVs is reportedly down recently.
  • ToolGuy Those of you who aren't listening to the TTAC Podcast, you really don't know what you are missing.