23.8 C
Brunei
Monday, August 15, 2022
23.8 C
Brunei
Monday, August 15, 2022
More
    - Advertisement -
    - Advertisement -

    Hyundai gets USD1.8B in aid to build electric cars in Georgia

    SAVANNAH, GEORGIA (AP) – The United States (US) state of Georgia and local governments are giving USD1.8 billion in tax breaks and other incentives to Hyundai Motor Group in exchange for the automaker building its first US plant dedicated to electric vehicles (EV) near Savannah, according to the signed agreement disclosed on Friday.

    The deal calls for Hyundai to invest USD5.5 billion 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 EV 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,” State Economic Development Commissioner Pat Wilson said in a statement.

    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.

    Georgia Governor Bran Kemp and Hyundai Motor Company President and CEO Jaehoon ‘Jay’ Chang shake hands after signing an agreement. PHOTO: AP

    Hyundai plans to start construction of the plant next year and begin producing up to 300,000 vehicles per year in 2025. The new factory also will produce vehicle batteries.

    But officials declined to reveal what incentives the automaker had been promised until after the agreement was signed.

    The package disclosed on Friday is worth roughly USD300 million more than incentives promised to Rivian. It amounts to Georgia and four counties in the Savannah area giving Hyundai about USD228,000 per job created.

    Georgia officials insist it’s a worthwhile investment. Wilson said Hyundai’s payroll at the new plant is expected to reach USD4.7 billion over 10 years. Parts suppliers are expected to create thousands of additional jobs in the state.

    Local governments are giving Hyundai more than USD472 million in property tax breaks, though Hyundai will pay more than USD357 million in lieu of taxes over a 26-year period starting in 2023.

    The company will also receive more than USD212 million in state income tax credits, at USD5,250 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 USD86 million to purchase the plant site. And the state will spend USD200 million on road construction and improvements, plus USD50 million more to help fund construction, machinery and equipment.

    Sales tax exemptions on construction materials and machinery expenses are estimated to cost USD396 million.

    Georgia officials said the deal requires Hyundai to pay back a portion of the incentives if the company falls below 80 per cent of promised investment or employment.

    - Advertisement -
    spot_img

    Latest article

    - Advertisement -
    spot_img