The Hyundai Motor Group has received up to $ 1.8 billion in tax breaks and other incentives to build its first dedicated battery electric vehicle factory in the U.S. The incentives have been extended by the state of Georgia and local governments in exchange for the factory being built in Savannah with the agreement having been signed as of Friday, July 22, 2022, a report by the Associated Press stated.
The deal calls for an investment of $ 5.5 billion by the Korean carmaker in its Georgia facility along with hiring 8,100 workers. The deal is the state’s second in recent months for EV manufacturing with the state having closed another major deal with EV manufacturer Rivian a few months back. The deal with Hyundai is the state’s largest economic development deal till date.
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The new plant is set to commence production in 2023 with the aim of achieving an output of 3 lakh units per annum in 2025. Aside from electric vehicles the plant will also produce its own vehicle batteries.
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As part of the package Hyundai is set to receive $472 million in property tax brakes from local governments though the company will pay over $357 million in lieu of taxes over a 26-year period starting next year. The company will also be receiving over $212 million in state income tax credit.
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Additionally, the state and local government bodies will be making expenditures amounting up to $330 million to acquire the land, build and improve roads and fund construction, machinery and equipment. Furthermore, Hyundai is also set to receive sales tax exemptions on construction materials and machinery estimated to amount up to $ 396 million.
Hyundai though is expected to pay back a portion of the incentives to the state should the company fall below 80 per cent of the promised investment or employment.
