South Korean auto giant Hyundai Motor Group will invest $7.4 billion by 2025 to establish its presence in the US electric vehicle (EV) market. The investment will focus on upgrading the Montgomery plant operated by Hyundai Motor Manufacturing Alabama while commercializing fuel cell electric trucks, hydrogen fuel cells, and driverless technology. The planned expansion comes after President Joe Biden pledged in March 2021 to expand electric vehicle production and infrastructure across the United States by 2030, a move that paved the way for Hyundai to cement its presence as a major EV producer in the country.
US subsidiary Hyundai Motor America traces its roots to the success of the Hyundai Excel subcompact in the late 1980s. Further expansion occurred when Hyundai Motor America established Hyundai Motor Manufacturing Alabama in 2004 and the Hyundai America Technical Center in Michigan the following year. As of October 2020, Hyundai Motor accounted for 8.9% of the US automotive market, and the company is determined to expand its share by investing and leading in electric car sales in the United States.
Hyundai plans to upgrade its Montgomery facility in 2021 and begin EV production there in 2022. Hyundai’s planned expansion would create more jobs in Alabama and could have positive spillover effects on related suppliers in Georgia.
To establish an EV ecosystem, Hyundai has already begun collaborating with private companies and local governments in the United States. In 2019, the firm partnered with Cummins, a US-based heavy equipment company, to develop hydrogen fuel cell technology that will be used in one of Hyundai’s EV models. The following year, Hyundai signed a memorandum of understanding with the US Department of Energy that included support in installing a hydrogen refueling system within the Washington, DC, metro area and an agreement to supply the agency with five Hyundai NEXOs, a hydrogen fuel cell SUV. Hyundai Motor Group has also invested in Boston Dynamics, a mobile robot firm, and established a joint venture named Motional in March 2020 with Aptiv, a US technology company. Motional develops driverless technology and plans to launch a robotaxi service with Lyft in 2023.
Hyundai's investment in EV production and related technologies will empower local economies in Alabama, Indiana, and Massachusetts while helping accelerate the adoption of electric vehicles in the United States. The company’s plans also strengthen business ties between the United States and South Korea, one of the largest foreign direct investors in America.
Natasia Engeline is a participant in the Young Professionals Program at the East-West Center in Washington. She is a graduate student at the University of Chicago’s Harris School of Public Policy. Her research interests include monetary and fiscal policy as well as ASEAN–US relations.