In recent years, the state of Georgia has worked toward becoming an electric-vehicle production hub. Now, with EV sales growth falling short of expectations, that plan has a few new wrinkles.
Consider Kia parent Hyundai, which is building a multibillion-dollar EV “metaplant” in the state, with production slated to begin in October. It’s now considering also making hybrid vehicles there, given the surging demand for them. That’s according to Jose Munoz, North American president and global chief operating officer, who spoke to CNBC this week.
“We are now getting ready for a ramp-up on electric vehicles, and then we are evaluating if we need to maybe add some additional technologies into the plan depending on the market evaluation,” said Munoz.
He noted the “high demand” for hybrid vehicles, adding, “You’re going to see an increase in the mix of hybrids in Hyundai.”
The South Korean giant—the world’s third-largest automaker by volume—is still bullish on EVs, trailing only Tesla in U.S. sales of them.
EV plans decelerating
Meanwhile, Tesla rival Rivian announced this month that it’s pausing construction of a $5 billion EV manufacturing facility 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 dramatic 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 facility on hold until otherwise indicated. The move stirred anger among lawmakers in Georgia, with one calling it “completely irresponsible.”
Other carmakers are also decelerating their EV plans given the lower-than-expected sales growth. Ford and GM, for example, have pared back their production plans for EVs while pivoting more to hybrids.
One challenge with EVs is that while early-adopter enthusiasts have already bought their vehicles, regular car shoppers are more likely to be turned off by the range anxiety, higher prices, and poor resale values associated with them. That might change as the EV infrastructure improves and more affordable models reach consumers.
Meanwhile Toyota, Ford, and other legacy automakers are enjoying surging sales of hybrid vehicles, which many drivers see as a more practical alternative to EVs.
Hyundai’s re-evaluation for its Georgia plant comes amid both this dynamic and the Biden administration revising emission rules this month in a way that better accounts for hybrids.
“Everything is on the table,” Munoz said. “We will adjust to the market demand and, for the time being, we are on track for what the regulators are requesting.”
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