Hyundai isn’t letting its recent immigration-related issues slow it down. Despite the unpleasant developments in Georgia, the automaker isn’t letting up and has promised to kick-start the second phase of its Metaplant expansion into gear by injecting $2.7 billion that will create another 3,000 local jobs to support made-in-America electric vehicles and hybrids.
Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. Also on deck: Europe says an influx of Chinese EVs would be more costly to jobs than the move away from internal combustion, and Slate Auto says there’s at least one upside to the EV tax credit going away. Let’s jump in.
30%: Hyundai’s Metaplant Grows Again With $2.7 Billion Cash Infusion
Photo by: Patrick George
Hyundai’s Georgia Metaplant is getting a huge infusion of cash from Korea as it enters Phase 2 of its expansion. The $2.7 billion investment will add an estimated production capacity of 200,000 units, bringing the total annual output coming out of Georgia to a whopping half-million vehicles by 2028, between 10 hybrid and full battery-electric models.
The automaker will announce this at its annual CEO Investor Day event in New York today.
To support that production, Hyundai says the investment will create around 3,000 jobs. That number is worth pausing on—3,000 jobs. It’s no small promise. Between Hyundai, Rivian, SK, and the numerous other e-mobility companies operating out of the region, the EV industry makes up a whopping 26,000 jobs in the region.
Hyundai’s labor pledge is an increase of 11.5% jobs. Its cash infusion is also significant, representing an additional 10% of the $27.3 billion pledged in Georgia’s local economy since 2018 from EV manufacturers and their downstream suppliers. This will help Hyundai reach its goal of manufacturing 80% of the cars it sells in the State domestically, and its investments in local supply chains will increase locally-sourced parts from 60% to 80%. Pretty darn impressive.
The Metaplant itself is supposed to be Hyundai’s next-gen manufacturing hub in the U.S. In fact, the company brags that the Metaplant is its new “software-defined factory,” which is basically a buzzword to say that the factory will feature fancy automation systems and robotics tech derived from its investments in Boston Dynamics.
All part of its plan to crank out an additional 1.2 million cars by the top of the decade, bringing its total electrified output to 3.3 million units per year. And the Metaplant? It will build 15% of those cars.
Numbers aside, the subtext here is what’s important. Georgia has somehow managed to become the unofficial EV capital of the Southeast and Hyundai’s cash promise should be seen as a vote of confidence in the community. It’s also a corporate promise to build where it sells (right on U.S. soil). The bet that building cars in America is the best way to sell them—and sell them fast—is the one that makes Hyundai feel is the safest way to keep its EV future on track.
In the meantime, relations between the U.S. and South Korea will need some patching up after the massive immigration raid, but continued investment between the countries may just help.
60%: The Shift From EV To ICE Might Cost Jobs, But China’s EV Push Could Cost More
Photo by: BYD
There’s a phrase that Valeo CEO Christophe Perillat said during his presentation at the IAA Mobility Show last week that will breathe cold air down your back in a blizzard: “When an industry is gone, it’s gone, it doesn’t come back.”
He’s talking about Europe’s auto industry. Specifically, the double-gut-punch threats it faces—not just from a significant shift away from combustion engines towards EVs (and the potential factory automation that comes with it), but also the looming threat of inbound Chinese EVs that could undercut everything that the European automaker has to offer.
Perillat echoed warnings that trade groups like the European Association of Automotive Suppliers (CLEPA) have issued, calling for what some call “smart protectionism” rules across Europe to prevent a rapid overrun of the auto industry. Without it, the industry has raised flags that the repercussions could be far worse in both numbers and reach than the jobs lost by moving from ICE powertrains to EVs.
Automotive News explains:
European content requirements are a “flagship action” in the European Commission’s action plan for the automotive industry that was released in March, but Perillat and lobby groups say there is no time to waste.
On the one hand, Perillat says, the shift from ICE to BEV will cost jobs because it takes fewer hours to build EVs and electric-car components. The lobbying group CLEPA and others have said hundreds of thousands of positions are likely to disappear in the next 15 years.
CLEPA said in a study released Sept. 10 that “without urgent EU action,” Europe could lose up to 350,000 jobs, through “the combined effect of powertrain transition and value transfer outside the EU.”
Chinese automakers such as BYD, Chery and Leapmotor are building assembly plants in Europe, or have announced plans to produce on the continent. If the cars coming from those plants are built from pressambled kits (semi-knockdown or complete knockdown) then more jobs could be affected, Perillat said.
“One erosion is a lot,” he said of the shift to EVs, “but when you consider that the content of cars that is produced locally might decrease and go to China, then this double erosion starts to be unacceptable.”
Those pre-assembled kits are a big concern, especially as automakers like Chery set up shop in Spain just to handle the final assembly of the kits. And even though local jobs will be retained to handle final assembly, the downstream supplier jobs that would otherwise be created to build the batteries, powertrains and other components may no longer be local to Europe.
That’s why those advocating for protectionist rules to safeguard Europe’s auto industry are calling for as local European content sourcing requirement as high as 80%. For comparison, the ICE industry has a local sourcing figure of around 90% local content versus 35% to 45% for BEVs.
This feels significantly reminiscent of the local sourcing requirements for the EV tax credit under the Biden administration, no? If an automaker wanted to qualify for the tax credit, it had to meet certain parts sourcing requirements—otherwise, it was effectively priced above the competition. And in Europe’s case, it’s meet it or beat it. “When it’s gone, the expertise is gone as well,” Perillat said. “The ecosystem is gone.”
90%: Slate Outlines One Battery-Related Upside To The EV Tax Credit Phase-Out
Photo by: Kevin Williams/InsideEVs
The end of the EV tax credit is a pretty dismal thing to think about. Maybe we’re a bit desensitized to it now, but it’s still going to sting the next time a new car buyer signs on the dotted line for their shiny electric crossover, knowing that it almost cost them $7,500 less. But there is one upside, according to that new up-and-coming EV startup, Slate: battery availability.
As automakers taper production to meet an anticipated lull in EV demand, the effects are beginning to ripple down the supply chain. Battery makers, for example, are reporting that they have some production capacity breathing room for the first time in years. While that might not be great news for the accountants, it’s awesome news for startups like Slate or just about any company that has been overpaying on batteries due to inflated demand.
Here’s what Slate CEO Chris Barman said at a recent Fortune conference:
“It’s opened up some opportunity for us,” Chris Barman, CEO of the emerging EV company, said on stage on Tuesday at Fortune’s Brainstorm Tech conference in Park City, Utah. Slate Auto had been “very focused” on making sure it could offer that rebate, she said, which required the company to meet certain mineral and manufacturing location requirements.
“What we’ve done is we’ve stepped back and surveyed multiple battery suppliers, and what we’re seeing is there are others in the industry that are pulling back as well on their EV launch plans—so it’s opening up capacity,” Barman said. “So we’re going out and seeing…taking survey on what’s there, and see what we can do to look at pricing.”
Barman’s words echo that of others in the EV industry following EV battery prices. Historically, battery prices have followed that of raw materials, and as demand for EV batteries increased, so did the price. However, economies of scale also helped to bring down the overall cost per kilowatt-hour to record lows. It’s easy to see why so many automakers and partners invested in domestic battery manufacturing capacity over the last few years.
If demand falls for EV battery cells, prices are expected to follow. Eventually, the two will fall into a natural cadence that reflects the true market price. That’s good news for manufacturers looking to cut costs with a sudden perceived price hike, and even better news for small EV startups.
But for Slate in particular, the chance to actually buy cells without being forced into a corner is something that the brand is undoubtedly excited about.
It gives Slate the opportunity to evaluate multiple manufacturers and price points to help offset costs for its uber-cheap electric pickup. And, hey, maybe it’ll even help to drive down the price a bit, too (we can dream).
100%: Would You Really Buy A Stripped Down EV? Where’s Your Limit?
Photo by: Slate
Slate’s concept is one of my favorite things to happen to the auto industry in years. Every time I think about those plastic panels, I think of Saturn and the mission that General Motors originally penned for the brand: autonomy (not the self-driving kind) to reinvent the small, affordable car market.
But here’s the thing—Slate takes it further. All of those modern amenities that Slate strips out to save on the last few dollars eventually start to add up. Sure, we say we want roll-up windows and no stereo, but do we really? What if you could option the truck without air conditioning? Or how about falling back to sealed beam headlights? Or (and hear me out), a battery that only mustered 100 miles of range around town?
How much would you sacrifice in a cheap car, and what would you pay even with all of those missing features? Let me know in the comments.
