The US state of Georgia and local governments are giving $1.8 billion in tax breaks and other incentives to Hyundai Motor Group in exchange for the automaker building its first American plant dedicated to electric vehicles near Savannah, according to the signed agreement disclosed on Friday.
The deal calls for Hyundai to invest $5.5bn in its Georgia plant and hire 8,100 workers. It’s the largest economic development deal in the state’s history and comes just months after Georgia closed another major deal with electric vehicle maker Rivian to build a factory in the state.
“Not only do these generational projects solidify our spot at the vanguard of the EV transition, but they also ensure that thousands of Georgians across the state will benefit from the jobs of the future,” Pat Wilson, the state’s economic development commissioner.
Hyundai executives and Governor Brian Kemp announced the deal in May at the project’s sprawling 1,170-hectare site in Bryan County, west of Savannah. Hyundai plans to start construction on the plant next year and begin producing up to 300,000 vehicles per year in 2025. The factory will also produce vehicle batteries.
But officials declined to reveal what incentives the automaker had been promised until after the agreement was signed.
The package is worth around $300 million more than what was promised to Rivian. It gives Hyundai $228,00 per job created.
Georgia officials state that it’s a worthwhile investment. Wilson said Hyundai’s payroll at the new plant is expected to reach $4.7bn over 10 years. Parts suppliers are expected to create thousands of additional jobs in the state.
The $1.8bn in incentives is easily the largest subsidy package a US state has ever promised for an automotive plant, said Greg LeRoy, executive director at Good Jobs First.
The company will also receive more than $212m in state income tax credits, at $5,250 per job over five years. If Hyundai didn’t owe that much state corporate income tax, Georgia would instead give the company personal income taxes collected from Hyundai workers.
The state and local governments spent $86m to purchase the plant site. And the state will spend $200m on road construction and improvements, plus $50m more to help fund construction, machinery and equipment. Sales tax exemptions on construction materials and machinery expenses are estimated to cost $396m.
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