For a lot of the previous twenty years, nearly all of electrical vehicle-related investments have gone to Republican-led districts, particularly within the Southeast. With the business pulling again from electrical automobiles and vans, the destiny of these investments is now an open query.
Automakers and battery makers invested extra $200 billion in EV and battery manufacturing amenities within the U.S. from roughly 2000 to 2024, in keeping with knowledge and coverage analysis agency Atlas Public Coverage. About 84% of battery investments went to Republican-led districts, in addition to 62% of EV manufacturing investments, the agency mentioned. These had been anticipated to create greater than 200,000 jobs, 77% of which might be in Republican districts.
Virtually half of all that funding — 40% — went to the Southeastern U.S., in keeping with Atlas. For greater than half a century, the South has turn into a producing hub for the automotive business, however the EV push yielded a few of the greatest investments within the historical past of the area.
Then federal incentives for EVs enacted by way of the Biden-era Inflation Discount Act had been stripped away, and gross sales fell wanting expectations. The businesses that may are pivoting to different varieties of automobiles or completely completely different merchandise to keep away from losses and layoffs.
Hyundai Metaplant
The Hyundai Metaplant is seen on Sept. 9, 2025, in Ellabell, Georgia.
Elijah Nouvelage | AFP | Getty Photos
Hyundai Motor Group is without doubt one of the automakers making modifications after an EV push.
The group, which incorporates the Hyundai, Genesis and Kia manufacturers, was for a time the No. 2 vendor of EVs within the nation after Tesla, in keeping with José Muñoz, CEO of Hyundai Motor Firm.
However the finish of federal incentives for EVs was instantly adopted by a dramatic drop in gross sales. Total, HMG’s EV gross sales had been rising within the first quarter. By the fourth quarter, that they had fallen 50%.
“We nonetheless do higher than the business,” Munoz mentioned, “But it surely had an affect within the business, which we may clearly see within the fourth quarter.”
Hyundai has lengthy had a big manufacturing unit in Montgomery, Alabama, however the firm made an unprecedented guess on a $12.6 billion EV manufacturing unit and joint battery ventures exterior Savannah, Georgia, when it introduced it in 2022.
The Hyundai Metaplant, as it’s referred to as, was the biggest funding in Georgia’s historical past, taking the title from Rivian‘s $5 billion manufacturing unit exterior Atlanta. Hyundai estimated the plant would rent about 8,500 employees by 2031, with one other 6,900 at close by suppliers. As of January, the corporate had employed about 1,440.
In 2024, Georgia led the nation in EV manufacturing funding, in keeping with Atlas. Its Republican governor, Brian Kemp, had mentioned he wished to make the state the “electrical mobility capital” of the US.
Hyundai’s Metaplant manufacturing unit was initially supposed solely for EV manufacturing. The corporate truly sped up development so its critically acclaimed — and, for an EV, strong-selling — Ioniq5 crossover could be eligible for the federal $7,500 EV tax credit score. The Inflation Discount Act required that EVs be assembled within the U.S. and have a minimal U.S. elements content material to qualify.
However the “One Large Stunning Invoice” took these credit away, as of Sept. 30.
In consequence, Hyundai introduced an extra $2.7 billion funding in Metaplant to extend manufacturing by 200,000 items, focusing on an annual output of half one million automobiles. It’s now planning a mixture of 10 hybrids and EVs, and Munoz expects gross sales volumes might be about 30% EVs and 70% hybrid and fuel.
Write-downs
Haig Companions managing director John Murphy has estimated that automakers within the U.S. will seemingly face no less than $100 billion in write-downs on their EV investments, which means these investments are unlikely to yield the anticipated income — or any income in any respect.
“It is the one greatest capital allocation mistake within the historical past of the automotive business,” Murphy mentioned.
It is already began. Ford mentioned in December it’s going to take a $19.5 billion cost on its EV enterprise, which has not turned a revenue, whereas crosstown rival Basic Motors mentioned it’s going to take a $7.6 billion cost. Worldwide automakers akin to Honda, Porsche and Volvo have all warned traders of comparable expenses of no less than a billion {dollars}.
Muñoz advised CNBC he doesn’t anticipate Hyundai have write-downs. A key Hyundai technique is flexibility — making 10 fashions in single plant — because it plans to do in Metaplant, and even 12 in its soon-to-open manufacturing unit in Ulsan, South Korea, which has given it the power to pivot as market situations change.
“The extra flexibility you’ve gotten, the much less points you’ve gotten with modifications within the atmosphere,” he mentioned. “So I believe, knock on wooden, I do not assume we will see some of these write-offs that we have seen with different opponents.”
EV gross sales forecasts are a fraction of what the business was anticipating just some years in the past. The Biden administration wished 50% of recent automotive gross sales to be EVs by 2030.
“That was the goal,” mentioned Peter Tadros, president of North America powertrain options for Bosch, the world’s largest automotive provider. “Then, over time, it dropped to 35, to 25, to 17. So now we’re at 17% projection for 2030. So an enormous, large hole from the preliminary projection.”
Bosch had made a $250 million funding in its manufacturing unit in Charleston, South Carolina, which included plans for an electrical motors division.
“Now the funding was not made for 50% market, however it was not made additionally for 17%,” Tadros mentioned.
Meaning the corporate has needed to regulate. Bosch was capable of transfer practically all workers from the EV motors division to different departments. The manufacturing unit additionally produces security gadgets akin to digital stability management and gas injection programs — which it expects to be in better demand because the market pivots again to gas-burning automobiles.
Nonetheless, the guess it made on EVs did “trigger some ache,” Tadros mentioned.
“You are stranded with this gear, not producing as many accurately producing to make up for this depreciation,” Tadros mentioned. “So it is right here. It is able to go. We look ahead to making much more motors sooner or later. However proper now, it is a tough scenario for that section.”
