We ask for 'chance to compete fairly' in US: Hyundai Motor official

Robert Hood, vice president of government affairs at Hyundai Motor, speaks during an online webinar hosted by the Woodrow Wilson Center, Thursday. Screenshot from YouTube

By Kim Hyun-bin

A high-ranking Hyundai Motor official stressed that if the damage suffered by the company increases due to the U.S. Inflation Reduction Act (IRA), which excludes electric vehicles (EV) that undergo final assembly in Korea from a tax credit, the economic feasibility of investing in an EV plant in the state of Georgia may need to be reconsidered.

In a webinar hosted by the Woodrow Wilson Center on Thursday (local time), Robert Hood, vice president of government affairs at Hyundai Motor, was asked, “Is there a possibility that Hyundai Motor Company will cancel or reduce its investment in an EV plant in Georgia because of the IRA?”

"If sales don't start to increase, we will have no choice but to seriously question whether the plant makes economic sense," Hood said. "Instead of receiving incentives from the state of Georgia, where we host the plant, we will be penalized if we do not meet our employment and production targets. Obviously, labor and production costs are much cheaper in Mexico.”

However, he emphasized that the U.S. market is very important and that Hyundai Motor does not want to leave the U.S., saying that the Kia Corp. Georgia plant and Hyundai Motor's Alabama plant were a success.

The vice president said there needs to be time to adjust to the new rules of the IRA and asked the U.S. government for "a chance to compete fairly for the next few years."

“Basically we were number two in EV sales behind Tesla just a month ago, but we've now lost that and we will chase further behind our competitors that are offered tax benefits,” Hood said.

He met with several senior U.S. administration officials and congressional officials to discuss solutions.

“We are already making investments, such as holding a groundbreaking ceremony for the factory and finishing site maintenance. Our request is that the U.S. not punish us for making the investment,” he added. “The economic issue for us is that the plant was designed to produce 800,000 cars a year, but if we're not growing our sales to get to that number, it really falls into question whether or not that was a smart investment.”

The Korean government and Hyundai Motor have submitted their opinions to the U.S. government to delay the implementation of the IRA, for three years until 2025 when the Georgia EV plant is completed. The act gives a tax credit to U.S. consumers of EVs that undergo final assembly in North America, with critical minerals in their batteries that are mined or processed from the U.S. or countries with free trade agreements with the U.S., and with battery components manufactured or assembled in North America.