Hyundai Motor commits $21 billion to US vehicle manufacturing, supply chain and logistics

As part of an overall commitment to inject $21 billion in its US business between now and 2028, Hyundai Motor announced this week it is spending $6 billion to localise parts and strengthen logistics, as well as investing in US steel production. The carmaker said it will be strengthening Hyundai Group logistics to “ensure robust supply chains” in the US.

This week also sees the official opening of the Hyundai Motor Group Metaplant America (HMGMA) in Ellabell, Georgia, which has installed production capacity for 300,000 electric vehicles (EVs) annually. However, Hyundai has now said it will expand HMGMA’s annual production capacity to a total of 500,000 units as part of its latest announcement on overall investment in the US.

Hyundai’s commitment to increase localised production of vehicles and source metals in the US is made in the volatile context of current America First policy on imports, in part designed to protect domestic industries, including carmaking, and steel and aluminium manufacturing, from foreign competition, as well as address perceived trade imbalances. However, the imposition of 25% tariffs on automotive imports from April, which Donald Trump confirmed this week, also threatens to disrupt global supply chains and, more closely, those in North America, potentially increasing prices for end consumers.

Boosting US domestic production
As part of its localisation efforts in the US, the Hyundai Motor Group intends to invest $9 billion to increase annual US vehicle output to 1.2m units a year, including for the Hyundai, Kia and Genesis brands. It also announced it will invest a further $6 billion to expand future industries, such as autonomous driving, robotics, AI and advanced air mobility (AAM), as well as strengthen cross-industry collaboration and energy infrastructure, including for EV charging (see box).

The $6 billion aimed at localisation of parts sourcing includes core parts for EVs, notably battery packs. The carmaker will set up an automotive cluster when it has expanded its production facilities, including those in Alabama and Georgia.

Hyundai EV metaplant in Georgia 
The official opening of HMGMA this week, which is Hyundai’s first dedicated EV mass-production plant, follows a joint investment of $5.54 billion by the carmaker and its suppliers in the site in Bryan County. That investment includes digital technology that will be used to connect and optimise processes from order collection, procurement, logistics and production. The carmaker said that the innovative manufacturing system will also help create a human-centered work environment with robots assisting human workers. Work began on the plant in 2022.

HMGMA will create around 8,500 jobs over the next few years, according to the carmaker, as it aims to establish a stable supply chain for EV battery and other EV components in the US market.

At the HMGMA, Hyundai is already using heavy-duty hydrogen fuel-cell electric trucks for logistics operations. Hyundai Xcient Class 8 etrucks will be used to transport parts inbound from suppliers to the plant complex near Savannah by the vehicle maker’s joint venture with Glovis America – HTWO Logistics.

Steel recycling
In addition, Hyundai Steel plans to build a $5.8 billion electric arc furnace steel mill in Louisiana, on the Rivermex Megapark in Ascension Parish, capable of producing 2.7m tons of steel annually. Hyundai said the low-carbon steel sheets made from an abundant supply of scrap in the US would enhance Hyundai Group’s “agility and flexibility in the response to external uncertainties”.

“We plan to supply automotive steel plates not only for Hyundai Motor and Kia’s strategic models but also to expand sales to US automakers in the future,” said Hyundai Steel president and CEO Gang Hyun Seo.

To support rail shipments of the steel Union Pacific announced this week that it will serve the mill and take steel to connect with short-line services to the Hyundai vehicle production plants in Alabama and Georgia, which are served by CSX and Genesee & Wyoming respectively. Steel will also be transported by road.

Hyundai said that its combined investment and development efforts will further expand operations in the US and grow the American workforce. It aims to create more than 100,000 direct and indirect jobs by 2028 as a result of the expansion plans, including 14,000 direct full-time jobs.

In terms of energy infrastructure, Hyundai plans to support sustainable energy generation. That includes a deal between Hyundai Engineering & Construction and Holtec Engineering on small modular reactor technology and an investment in the Ionna EV charging alliance to expand infrastructure. Ionna is joint venture founded by BMW, GM, Honda, Hyundai, Kia, Mercedes-Benz, Stellantis and Toyota. It announced reaching a national release stage in February this year and has more than 100 contracted sites across the US.