Hyundai Motor mulls how to expand EV production in the US

Hyundai Motor is reviewing plans to expand electric vehicle production in the US.

The company is likely to expand its existing facilities in Alabama and Georgia, built in 2005 and 2010, respectively, but could also build a new factory in Tennessee, people familiar with the matter said.

Sunbelt regions don’t have a culture of forming labor unions, making it advantageous to Hyundai Motor, a senior executive at a parts supplier to the automobile maker said.

But the Biden Administration is pro-labor, so the South Korean company wouldn’t want to jeopardize its relationship with the US government and push for a factory there, they said.

That is why Hyundai Motor will likely seek to build electric vehicle production at its existing plants in Alabama and Georgia, they added, while considering the option to build a new facility in Tennessee, home to factories of other companies such as Nissan, General Motors, Ford And Volkswagen as well as South Korean autopart makers.

Tennessee was considered a candidate for a new factory by Hyundai Motor in 2011.

However, another source at a Hyundai Motor supplier said there was currently a shortage of labor forces at Alabama and Georgia due to the US automobile companies expanding their electric vehicle production there.

Meanwhile, South Korean analysts believe as Hyundai Motor, Kia and Genesis plan to launch seven models of electric vehicles in the US this year, spending plans will likely be conservative, so the automobile giant will convert existing production liens for electric vehicles.

As electric vehicles have around a 3% penetration rate in the US, Hyundai Motor could also find too high a spending plan risky, they said.

Biden Administration is also planning to offer subsidies for companies registered to United Auto Workers Union.

Meanwhile, Hyundai Motor has previously said it plans to spend US$7.4 billion up to 2025 in the US, which includes plans to expand its electric vehicle production there.