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At Biden meeting, Hyundai Motor Group unveils extra $5b investment

South Korean carmaker surprises with combined $10.5b investment in US

May 22, 2022 - 15:10 By Kim Da-sol
Hyundai Motor Group Executive Chair Chung Euisun (left) shakes hand with US President Joe Biden (right) after the briefing held at Grand Hyatt Seoul in Seoul, Sunday. (Yonhap)

South Korean carmaker Hyundai Motor Group announced the second round of its investment plan Sunday, adding another $5 billion to collaborate with US firms, only a day after the company unveiled a $5.54 billion plan to build an electric vehicle-only factory in Georgia.

“Hyundai Motor Group plans to invest an additional $5 billion through 2025 which will strengthen our collaboration with American enterprises in diverse technologies such as robotics, urban air mobility, autonomous driving and artificial intelligence,” said Hyundai Motor Group Executive Chair Chung Euisun after a private meeting with US President Joe Biden in Seoul on Sunday morning.

“This will enable us to grow into a company that offers better convenience and safety to our customers. I humbly ask for the Biden administration’s continued support for our US operations.”

Biden responded to Chung, saying, “We won’t let you down.” 

“Electric vehicles are good for our climate goals, but they’re also good for jobs. And they’re good for business,” Biden said, touting the automaker’s decision to build an EV plant in Georgia as “a new opportunity” that would create some 8,100 jobs.

The announcement was made before Biden left for Tokyo on the second leg of his Asia tour. The two talked for nearly an hour before speaking to press. Details of the additional investment in robotics and UAM will be released in the near future, according to officials. It remains unclear whether the carmaker will invest in existing US strategic partners such as autonomous driving service developer Aurora, AI platform developer Nvidia and voice recognition and AI tech developer SoundHound. Last year, it bought US robotics developer Boston Dynamics for 996 billion won. The carmaker may look for new partners in the future mobility sector, according to market observers.

With the series of investment plans unveiled over the weekend, Hyundai is set to invest over $10.5 billion in the US alone, the largest overseas spending by the Korean company so far. It is $3 billion higher than its initial plan for a $7.4 billion investment in the US by 2025, announced at Consumer Electronics Show in January.

A day earlier, the group announced a plan to inject $5.54 billion to build its first plant dedicated to EVs and battery manufacturing in Georgia. Some 300,000 EVs annually are to be produced there beginning in the first half of 2025. 

The latest plan is part of the automaker’s announcement earlier this year to expand its EV manufacturing scale and satisfy US market demand. The carmaker aims to pull up its eco-friendly models’ sales portion to 50 percent in the US market by 2030. 

“The US has always held an important place in the group’s global strategy, and we are excited to partner with the state of Georgia to achieve our shared goal of electrified mobility and sustainability in the US,” said Hyundai head Chung, who virtually attended the official signing ceremony held in Bryan County, outside of Savannah, Georgia, Saturday. 

The automaker said it selected Georgia due to a range of favorable business conditions, including a talented workforce and an existing network of company affiliates and suppliers. Spanning across 11.8 million square meters in Bryan County, the new plant is just 400 kilometers from Kia Georgia. 

The carmaker can also leverage the location’s accessibility to the I-95 and I-16 highways that create easy access to 250 major metropolitan areas, as well as its vicinity to the Port of Savannah. Hyundai Motor said it aims to set up a stable procurement network for EV production and sales.

With $5.54 billion, the carmaker also plans to build a battery manufacturing facility to establish a stable supply chain and build a healthy EV ecosystem in the US.

Currently, the automaker runs two plants in the US. Hyundai Motor’s flagship models like the Sonata, Tucson, Avante (Elantra) and Santa Cruz have been manufactured in Georgia’s western neighboring state of Alabama since 2005. From later this year, electric and hybrid models like the Genesis GV70 and Santa Fe hybrid will be also built there.

At Kia Georgia, Kia’s flagship models like the Sorento, K5 and Telluride are produced. Its production capacity is 340,000 annually. Auto parts from Hyundai Mobis are also manufactured there.