Hyundai gets $1.8 billion in aid to build electric cars in Georgia

SAVANNAH, Ga. (AP) – Georgia state and local governments are providing $1.8 billion in tax breaks and other incentives to Hyundai Motor Group in exchange for the automaker building its first plant company dedicated to electric vehicles near Savannah, according to the signed agreement unveiled on Friday.

The deal calls for Hyundai to invest $5.5 billion in its Georgia plant and hire 8,100 workers. It’s the largest economic development deal in state history and comes just months after Georgia reached another major deal with electric vehicle maker Rivian to build a factory in the state.

“Not only do these generational projects solidify our place at the forefront of the transition to electric vehicles, they also ensure that thousands of Georgians across the state will benefit from the jobs of the future,” said Pat Wilson, Commissioner to the economic development of the state. A declaration.

Hyundai executives and Gov. Brian Kemp announced the deal in May with a champagne toast at the project’s sprawling 2,900-acre (1,170-hectare) site in Bryan County, west of Savannah. Hyundai plans to start construction of the plant next year and start producing up to 300,000 vehicles per year in 2025. The new plant will also produce vehicle batteries.

But officials declined to reveal any incentives promised to the automaker until the deal is signed.

The package leaked on Friday is worth about $300 million more than the incentives promised to Rivian. That amounts to Georgia and four counties in the Savannah area, giving Hyundai about $228,000 per job created.

Georgian officials insist it is a worthwhile investment. Wilson said Hyundai’s payroll at the new plant is expected to reach $4.7 billion over 10 years. Parts suppliers are expected to create thousands more jobs in the state.

The $1.8 billion in incentives is by far the biggest grant package a U.S. state has ever promised an auto plant, said Greg LeRoy, executive director of Good Jobs First, a grant-skeptical group. to private companies.

“It’s inherently super risky,” LeRoy said, “because you’re betting a lot on a company and a facility.”

Local governments are giving Hyundai more than $472 million in property tax relief, though Hyundai will pay more than $357 million in tax relief over a 26-year period beginning in 2023.

The company will also receive more than $212 million in state income tax credits, at $5,250 per job over five years. If Hyundai did not owe so much corporate income tax, Georgia would instead give the company personal income taxes collected from Hyundai workers.

State and local governments spent $86 million to purchase the plant site. And the state will spend $200 million on road construction and improvements, plus another $50 million to help fund construction, machinery and equipment. Sales tax exemptions on spending on building materials and machinery would cost $396 million.

Georgian officials say the deal requires Hyundai to repay part of the incentives if the company falls below 80% of the promised investment or employment.

Kia, another subsidiary of the Hyundai Motor Group, has secured more than $450 million in incentives for its plant in West Point, southwest of Atlanta. Georgia has promised SK Innovation $300 million in incentives for a $2.6 billion, 2,600-worker battery plant the Korean company is building northeast of Atlanta.

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