Hyundai Motor Group is considering moving up its timeline for building an electric vehicle plant, due to disagreements over a new US clean energy law, according to sources familiar with the situation.
The Seoul-based automaker is considering whether it can complete construction of a US plant in Savannah, Georgia by October 2024, according to people familiar with the matter. The facility, which is expected to cost around $5.5 billion to build, was initially slated to open in the first half of 2025. Construction has not yet started.
Hyundai representatives said that the company has no plans to change the timeline for its manufacturing plant.
President Joe Biden's Inflation Reduction Act, signed into law in August, offers subsidies of up to $7,500-a-car for EV makers but only if those cars are assembled in North America. This has caused some tension with South Korea, who feels that the US rules favor American-made EVs and batteries. Several Korean firms have outlined large-scale EV-related investment plans in the US, and they feel that this new law betrays their trust.
Hyundai Motor Group, which owns the Hyundai, Kia, and Genesis brands, does not currently have a plant in the US that manufactures electric vehicles.
The carmaker does have a few combustion engine car plants in North America, including one in Alabama. However, it would not be easy to convert those facilities into EV plants, according to one of the people familiar with the matter.
The Alabama plant has the capacity to produce around 370,000 cars per year, which is equivalent to around 8% of Hyundai's total production capacity. Electric car sales made up for approximately 5.4% of Hyundai's total vehicle sales in the second quarter.
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