The state of Georgia and local governments are giving $1.8 billion in tax breaks and other incentives to Hyundai Motor Group in exchange for the Korean automaker building its first U.S. plant dedicated to electric vehicles.

Officials with both the manufacturer and state and local officials signed the agreement July 22 to build the factory west of Savannah, according to the Associated Press.

As part of the deal, Hyundai will invest $5.5 billion in its new Georgia plant and hire 8,100 workers. It is the largest economic development deal in the state's history and comes just months after Georgia signed another major agreement with electric vehicle maker Rivian to build a factory in the state.

"Not only do these generational projects solidify our spot at the vanguard of the EV transition, but they also ensure that thousands of Georgians across the state will benefit from the jobs of the future," Pat Wilson, the state's economic development commissioner, said in a statement.

Hyundai executives and Gov. Brian Kemp first announced the deal in May with a champagne toast at the project's sprawling 2,900-acre site in Bryan County. But state officials at that time declined to reveal what incentives the automaker had been promised until after the agreement was signed.

The automaker plans to start construction on the plant in 2023 and begin producing up to 300,000 vehicles per year in 2025.

The new factory also will produce vehicle batteries.

Deal is Largest Subsidy Package Ever for an Automaker

The package unveiled July 22 is worth roughly $300 million more than incentives promised to Rivian, according to the Associated Press. In breaking down the deal, it amounts to the state and four counties in the Savannah area giving Hyundai about $228,000 per job created.

Georgia officials insist the investment is worthwhile. Wilson said Hyundai's payroll at the new plant is expected to reach $4.7 billion over 10 years. In addition, parts suppliers are likely to create thousands more jobs in the state because of Hyundai's operations.

The $1.8 billion in incentives is easily the largest subsidy package a U.S. state has ever promised for an automotive plant, said Greg LeRoy, executive director Good Jobs First, a group skeptical of subsidies to private companies.

"That's inherently super-risky," LeRoy said, "because you're betting a huge amount on one company and one facility."

The state and local governments spent $86 million to buy the plant site, Georgia will spend another $200 million on road construction and improvements, plus an added $50 million to help fund construction, machinery, and equipment. Sales tax exemptions on construction materials and machinery expenses are estimated to cost $396 million.

Kia, another subsidiary of the Hyundai Motor Group, got more than $450 million in incentives for its plant in West Point, southwest of Atlanta. Georgia also has promised SK Innovation $300 million in incentives for a $2.6 billion, 2,600-worker battery plant that the Korean company is building northeast of Atlanta.

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