EV makers flocking to Georgia despite industry hesitation

Georgia continues to attract electric vehicle investments from both legacy brands and auto industry newcomers, disregarding the reputed cooldown in EV demand.

Driving the news: Some manufacturers like General Motors and Ford are dialing back plans to expand EV production capacity, disappointed with slower-than-expected sales. Despite this, Georgia continues to attract investments from electric car makers, with new sites opening as recently as last week.

• Hyundai Motor now operates two EV facilities in the state. The first, founded in 2010, began building the Kia EV9 this May after extensive factory upgrades. The second, which opened earlier this month, just produced the first batch of U.S.-made Hyundai Ioniq 5s.

• Rivian has also invested in Georgia, although construction on its $5 billion facility is currently on hold. However, the startup is looking to resume the project after filing an application last week for a federal loan.

• The state’s Department of Economic Development website lists 20 additional e-mobility companies with operations in Georgia, which has received roughly $27 billion in EV-focused investments over the last six years.

Behind the scenes: Georgia isn’t the only Southern state to attract investments from emerging sectors; around two–thirds of all new manufacturing projects are based in the South. However, it has been one of the most aggressive in its courtship of electric car manufacturers.

• Georgia currently outpaces investments in rival EV hotbeds North Carolina and Tennessee.

• Local incentives are one of the primary drivers of investment. The state offered Hyundai $2.1 billion alone in government subsidies and tax breaks for its newest facility.

• Companies are also attracted by Georgia’s ever-expanding repertoire of anti-union laws and policies shared by many of its Southern neighbors. One of the state’s newest rules, passed this March, prohibits companies from voluntarily recognizing unions without holding a secret ballot election.

Looking ahead: Georgia’s continually growing EV sector is interesting considering the ongoing downturn in electric car sentiments.

• While EV sales rose heavily across most of the auto industry during Q3, some brands, like Ford, struggled to maintain momentum.

• EV startups also struggled in Q3. Even though Rivian is looking to resume construction at its Georgia site, the company was recently forced to lower its production guidance by about 8,000 units for 2024 after sales dropped 27% from the previous quarter.

• Companies that are currently still driving growth in EV adoption, such as Tesla, are relying on heavy discounts and incentives to spur demand.

Bottom line: Georgia appears to be winning the EV race for now. However, as automakers continue to reevaluate their electrification plans, it remains to be seen whether their focus on the sector will pay off.

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