In recent years, the state of Georgia has worked to become an electric vehicle manufacturing hub. Now, with EV sales growth falling short of expectations, that plan has some new wrinkles.
Consider Kia’s parent company, Hyundai, which is building a multibillion-dollar electric vehicle “metaplant” in the state, scheduled to begin production in October. It is now considering producing hybrid vehicles there as well, given the growing demand for these vehicles. That’s according to Jose Munoz, North American president and global chief operating officer, who spoke to CNBC this week.
“Now we are preparing for the increase in electric vehicles, and then we are evaluating whether we will need to add some additional technologies to the plan depending on the market assessment,” Munoz said.
He noted the “strong demand” for hybrid vehicles, adding: “You will see an increase in the mix of hybrids at Hyundai.”
The South Korean giant, the third largest car manufacturer in the world by volume, is still optimistic about electric vehicles, behind only Tesla in sales of the same in the United States.
“Everything is on the table”
Meanwhile, Tesla rival Rivian announced this month that it will suspend construction of a $5 billion electric vehicle manufacturing plant in Georgia. The move came amid doubts about its ability to survive, with Tesla CEO Elon Musk suggesting last month that Rivian would go bankrupt in six quarters without drastic cost cutting.
While Rivian unveiled some upcoming models, it said they would be produced over the next few years at its existing plant in Illinois, with the Georgia plant on hold until otherwise noted. The move sparked anger among Georgia lawmakers, one of whom called it “completely irresponsible.”
Other automakers are also slowing their electric vehicle plans due to lower-than-expected sales growth. Ford and GM, for example, have scaled back their electric vehicle production plans, focusing more on hybrids.
One challenge with electric vehicles is that while early enthusiasts have already purchased their vehicles, repeat car buyers are more likely to be disappointed by the range anxiety, higher prices and poor resale values associated with them. That could change as electric vehicle infrastructure improves and more affordable models reach consumers.
Meanwhile, Toyota, Ford and other traditional automakers are enjoying rising sales of hybrid vehicles, which many drivers see as a more practical alternative to electric vehicles.
Hyundai’s reassessment of its Georgia plant comes in the context of this dynamic and the Biden administration’s revision of emissions rules this month to better account for hybrids.
“Everything is on the table,” Munoz said. “We will adapt to market demand and, for now, we are on track for what regulators require.”