Georgia is among the US states in which public officials have been on a rant against investing that follows environmental, social, and governance principles, or ESG for short. Nevertheless, Georgia has become a key state in the Biden administration’s efforts to step up the pace of decarbonization. The latest clean tech investment to hit the Peach State is a new $4.3 billion joint venture between Hyundai Motor Group and the electric vehicle battery maker LG Energy Solution.
Georgia To Lead US Electric Vehicle Revolution
The new EV battery joint venture will set up shop next to Hyundai’s forthcoming Metaplant America, which is already under construction in Savannah.
Under the agreement, the 50-50 venture will churn out batteries for electric vehicles at the rate of 300,000 EVs per year. That comes close to half the total number of EVs sold in the US last year, which topped 800,000 for the first time.
The new joint venture is not letting any grass grow under its feet. “Starting construction in the second half of 2023, the joint venture plans to start battery production at the end of 2025 at the earliest,” Hyundai affirmed in a press release last week. “Hyundai Mobis will assemble battery packs using cells from the plant, then supply them to the Group’s U.S. manufacturing facilities for production of Hyundai, Kia and Genesis EV models.
“The new facility will help create a stable supply of batteries in the region and allow the Group to respond fast to the soaring EV demand in the U.S. market,” Hyundai added, in a not-so-thin reference to the Biden administration’s focus on strengthening domestic supply chains (our complete Hyundai coverage is here).
Electric Batteries Mean Green Gold For Red States
That’s just the tip of the iceberg for Hyundai and for Georgia, too.
Hyundai took the opportunity to remind everyone that the new electric vehicle battery factory in Georgia joins six others under its wing, including some still in the construction phase.
Meanwhile, last January reporter Catherine Clifford of CNBC took note of an Energy Department report on state-by-state EV battery production in the US. “Georgia, Kentucky, and Michigan are going to dominate electric vehicle battery manufacturing in the United States by 2030,” Clifford summarized.
“Kansas, North Carolina, Ohio, and Tennessee will also be key players,” she added.
Oh the irony, it burns. These EV battery-friendly states have been front and center in a Republican-organized movement to protect fossil energy stakeholders from competition by throwing up throwing up roadblocks to ESG investing. That makes sense, considering that renewable energy is a prominent feature of ESG guidelines. However, it does put many state officials in the funny position of advocating against ESG, even as millions of fossil-killing dollars flow into their borders (more CleanTechnica ESG coverage is here).
Funny or not, Georgia, Kentucky, Michigan, Kansas, North Carolina, Ohio, and Tennessee will collectively help electric vehicle manufacturers meet the demand for zero emission mobility.
Clifford also takes note of a Federal Reserve Bank report last year, which reported a total of more than $40 billion in planned investments for the North American electric vehicle battery buildout.
How Red States Set The Stage For the Electric Vehicle Revolution
Adding to the burning irony is the overlap between the electric vehicle battery race and states with anti-union “right to work” laws.
About 28 states have laws on the books that restrict the ability of unions to organize, with the aim of driving down labor costs and attracting manufacturers.
Well, it worked. Many of these laws go back to the 1940s, long before the mass market for electric vehicles began to take shape. Overseas competition was also a leading factor, but after the 1940s, union-friendly northern states began their long slide into the notorious “Rust Belt” of the late 20th century, while right-to-work states continued to attract manufacturers with low labor costs. Now the low-cost labor factor has helped to set the table for EV production, and Georgia is a leading example.
Last December, Fortune ran a piece reported by Jeff Amy and AP, covering Hyundai’s other new electric battery venture in Georgia, an investment of up to $5 billion with the South Korean firm SK On.
The pieced was highlighted by a photo captioned, “Hyundai has been investing in Georgia for years.” That referred to a 2010 ribbon-cutting ceremony with former Georgia Governor Sonny Perdue for Hyundai’s first Kia factory in the US, located in West Point, Georgia.
Like Hyundai’s joint venture with LG, the SK project adds more fuel to Georgia’s sneak attack on fossil energy.
“SK already has a $2.6 billion battery plant in Commerce, northeast of Atlanta, with more than 2,000 workers,” Jeff Amy reported, noting that the Commerce plant also makes EV batteries for Ford and Volkswagen.
Who’s Afraid Of The ESG?
On its part, LG Energy Solution is happy to promote Georgia as an epicenter of the decarbonization trend.
“By ramping up its local production, LGES aims to provide innovative products both in scale and with speed, thereby expediting the clean energy transition in the U.S.,” LG said last week, referring to its new joint venture with Hyundai.
That may come as a surprise to Republican officials in Georgia, who signed joined 18 other states in signing on to an anti-ESG open letter organized earlier this year by Florida Governor Ron DeSantis.
“We as freedom loving states can work together and leverage our state pension funds to force change in how major asset managers invest the money of hardworking Americans, ensuring corporations are focused on maximizing shareholder value, rather than the proliferation of woke ideology,” the letter began.
“The proliferation of ESG throughout America is a direct threat to the American economy, individual economic freedom, and our way of life, putting investment decisions in the hands of the woke mob to bypass the ballot box and inject political ideology into investment decisions, corporate governance, and the everyday economy,” it continued.
Ouch! Georgia Governor Brian Kemp signed the letter on behalf of his home state, so perhaps he didn’t get the memo explaining how electric vehicles fit into the picture.
As reported by our CleanTechnica editor Zach Shahan, Hyundai’s new $5 billion EV factory in Georgia is one of the largest economic development deals in state history, and it came with a hefty assist from the public purse.
Last July, Manufacturing.net reported that the state of Georgia has committed an incentive package worth $1.8 billion, described as “easily the largest subsidy package a U.S. state has ever promised for an automotive plant.”
Fossil energy stakeholders who have been counting on the anti-ESG movement to beat back the wave of clean tech investing may need to take another look at what some of their purported red-state friends are doing about ESG investing, not saying.
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Photo (cropped) Hyundai Prophecy concept EV featured in “Spider-Man: Across the Spider-Verse,” courtesy of Hyundai.
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“ESG” stands for Environmental, Social, and Governance. It relates to the key factors stakeholders look for when evaluating non-financial, yet important, factors like sustainability and ethical impact, prior to investing, lending, and purchasing decisions.What is the new EV company coming to Georgia? ›
In May 2022, Hyundai Motor Group (HMG) announced plans to open its first fully dedicated EV and battery manufacturing facility in Georgia. HMG began construction on the new facility in January 2023, with full production expected in the first half of 2025, with annual capacity of 300,000 units.How many electric cars are in Georgia? ›
As of 2021, there were about 24,000 electric vehicles in the U.S. state of Georgia, accounting for 1.0% of all vehicles in the state.