Hyundai Motors started manufacturing electric vehicles (EVs) at a $7.6 billion factory near Savannah, Georgia.
Hyundai Motors, a South Korean giant known for its automobiles, announced a $21 billion investment to expand manufacturing in the United States. The investment includes building a new steel plant worth $5.8 billion in Louisiana that will produce 2.7 million metric tons annually and employ around 1400 jobs. The steel plants will supply steel to factories in Alabama and Georgia.
The company also plans to invest $9 billion to increase the production of Hyundai, Kia, and Genesis automobiles in the US. The rest of the money will go for projects like increasing renewable energy, artificial intelligence (AI), advanced air mobility, constructing more EV charging stations, and researching robots and self-driving cars.
The South Korean company plans to have an opening ceremony for its recent $7.59 billion car and battery plant in Georgia.
“Money is pouring in,” Mr. Trump said at the White House during an occasion that included Jeff Landry, governor of Louisiana, and Euisun Chung, the executive director of Hyundai. Does that make President Trump‘s ideology that his tariff policy creates jobs true?
Many companies announced investments after Trump returned to the White House. Trump has threatened to impose new tariffs on many foreign goods, like automobiles. So, when Hyundai promises to invest in the United States, it saves South Korea from tariffs or at least lower duties compared to other countries.
It would be a great escape for South Korea, which has a large trade surplus with the United States.
Automakers have joined hands to persuade Trump at the White House to avoid imposing new taxes on vehicles and parts. General Motors CEO Mary Barra informed Trump earlier this month that they want to invest $60 billion in the US but are worried about the uncertainty revolving around the tariff policies.
Hyundai has already made significant investments in the US. The company started manufacturing electric vehicles (EVs) at a $7.6 billion factory near Savannah, Georgia.
Hyundai is investing an additional $5 billion to build electric vehicle batteries close to Atlanta in partnership with South Korean battery manufacturer SK On.
Additionally, the South Korean manufacturer announced they would buy $3 billion worth of US-made liquefied natural gas (LNG).
Mr. Chung Ju-yung, founder of Hyundai, credited Mr Trump for the Georgia investments, claiming that the project started when the president visited Seoul in 2019 during his first term. Mr. Chung remarked that they are truly honoured for the investment and build a bright future in the US together.
The Hyundai factories in Georgia also benefited from the Democratic-passed subsidies during the Joe Biden administration. Hyundai also manufactures automobiles in Montgomery, Alabama, where its affiliate Kia has a plant in Georgia. The two older plants can create 700,000 vehicles annually, and the new Georgia plant can produce 300,000 cars annually when it becomes fully operational.
Hyundai has some protection against steel and auto tariffs imposed or threatened by the Trump administration thanks to the new factories.
By reducing Hyundai’s costs from tariffs at the US factories, Hyundai may have a competitive edge against its rivals like Ford Motor and General Motors, who import many of their electric vehicles from Mexico. Next month, Mr. Trump has threatened to impose 25% tariffs on goods from Mexico and Canada.
Mr. Trump reaffirmed his intention to impose tariffs on imported cars in the upcoming days. But there is a way to escape that trap. He states that there are no duties if the companies manufacture their goods in the United States.
The investment news caused Hyundai Steel’s stock to increase more than 5%, but as US President Donald Trump praised the company’s plan later in the day, it reversed its early gains and dropped 4.4%.
