America’s EV factory boom brings billion-dollar projects to tiny towns

Cars won’t start rolling off the assembly line at the “Metaplant” Hyundai Motor Co. is building on 3,000 wooded acres in Bryan County, Georgia, for at least a year. But the $7.6 billion electric-vehicle and battery project a half-hour west of Savannah already has a firm grip on the imagination of nearby residents.

One rumor making the rounds this summer was that Hyundai planned to buy the local golf course to turn it into housing for some of the plant’s eventual 8,500 workers—or to give them something to do on their downtime. Meanwhile, developers in the area are itching to turn soybean fields into subdivisions, local real estate agents say, though they’re stymied for the time by inadequate water and sewer lines.

In nearby Pembroke, which has a population of only 2,600, Shannon Thurston says he’s been seeing new faces at Taco Depot, the Mexican restaurant he and his wife run; he assumes they are Korean executives Hyundai has dispatched to oversee the project. “Several of what I believe to be upper management eat here now,” Thurston says. “I’ve gotta work on my Korean, for sure.”

Across the US, spending on the construction of manufacturing facilities reached $198 billion on an annualized basis in August, an almost 66% increase from the previous year and the highest level since the Bureau of Economic Analysis began tracking the data in the 1950s.

The flurry of activity is being fueled by a pair of laws Congress approved last year that together offer hundreds of billions of dollars in subsidies, tax credits and other incentives to spur the building of chip fabs and plants turning out EVs, batteries and components. It’s Washington’s bid to catch up to China in zero-emission autos and reclaim leadership in semiconductors, an industry the US pioneered.

America’s factory boom promises to bring investment and well-paying jobs to areas desperate for them. But along with the bulldozers and hard hat crews also come worries about whether there’s adequate infrastructure to support the new factories and concerns about the changing fabric of surrounding communities.

Few places are reaping the benefits of the Biden administration’s industrial policy push more than Georgia, where the state and local governments are also dangling tax breaks, free land and other perks to lure manufacturing jobs. Governor Brian Kemp has called Hyundai’s Bryan County plant the biggest greenfield investment in Georgia’s history. EV startup Rivian Automotive Inc. is plowing $5 billion into a factory 45 miles east of Atlanta that’s supposed to employ 7,500 workers by 2028. And there’s the multiplier effect of auto suppliers and other businesses moving to the Peach State to cater to the manufacturers moving in.

The US badly lags other major markets in adoption of EVs: Fully electric cars along with plug-in hybrids made up a little less than 9% of all passenger cars sold in the first half of 2023, compared with 27% in China, according to BloombergNEF. Now US demand is getting a jolt from the introduction of federal tax credits of as much as $7,500 on purchases or leases of new EVs, available through the Inflation Reduction Act that President Joe Biden signed into law in August of last year.

To take advantage of the tax incentives—scheduled to extend through the end of 2032, but at risk of being repealed if some Republicans get their way—automakers building US plants are trying to move from groundbreaking to ribbon-cutting in record time. Oscar Kwon, whom Hyundai tapped to lead the project in Georgia, spent four years in India helping to open a factory for Kia. He’ll have a little more than two years to get the facility near Savannah up and running. To help move things along, the state and municipalities are contributing $1.8 billion in tax credits, sales tax exemptions and road projects. “It’s a race,” says Trip Tollison, chief executive officer of the Savannah Economic Development Authority. “Everybody is trying to do all they can to get their product on the road.”

The ambitions of Hyundai and partner LG Energy Solution Ltd. will strain local supplies of workers, water and more. Michael Toma, an economist at Georgia Southern University, estimates the Hyundai Metaplant will support a total of 20,000 jobs—just shy of half at the facility itself, 5,000 more at auto suppliers and several thousand more at businesses that pop up to serve them. All that is equal to 10% of the Savannah area’s entire workforce.

A group of counties has pooled resources to build a massive wastewater treatment facility in anticipation of the plant’s arrival. But officials in Bryan County, which has a population of about 48,000, are tapping the brakes on other development so they can better assess infrastructure needs. After a surge in applications to rezone farmland near the factory site to allow for the construction of warehouses and multifamily residential complexes, commissioners voted to institute a temporary moratorium on approvals. “I can tell you, I’m not going to get an apartment complex in the next 18 months,” says Audra Miller, Bryan County’s community development director. “Yes, there will be growth. Will it be perfectly aligned with when Hyundai opens the doors? Probably not.”

Even if a large share of Hyundai’s future workforce ends up commuting in, Pembroke and other nearby towns will likely see their Main Streets transformed once the facility opens. That’s what happened in West Point, Georgia, a town of 3,700 that borders Alabama where Kia opened its first US factory in 2009. The area was once home to several textile mills, but it went into decline in the 1980s and ’90s as jobs moved offshore.