In the heart of the American South, where sprawling factories once promised a boom in electric vehicle production, a sudden pullback in the EV industry is casting uncertainty over billions in investments and thousands of jobs. For nearly two decades, automakers and battery manufacturers poured more than $200 billion into EV and battery facilities across the U.S., with the majority flowing into Republican-led districts, particularly in the Southeast, according to data from Atlas Public Policy. Now, with federal incentives for electric vehicles eliminated and sales plummeting, companies are scrambling to pivot, leaving the future of these massive projects in doubt.
The Southeast has long been a cornerstone of U.S. automotive manufacturing, but the EV surge represented some of the region's largest bets ever. Atlas Public Policy reports that about 84% of battery investments and 62% of EV manufacturing investments targeted Republican districts, expected to generate over 200,000 jobs, with 77% in those areas. Nearly half—40%—of the total investment landed in the Southeast, transforming states like Georgia and Alabama into hubs for what was hailed as the next industrial revolution.
That vision began to falter last year when the Biden-era Inflation Reduction Act's EV incentives, including a $7,500 tax credit, were repealed under the "One Big Beautiful Bill" effective September 30. EV sales, which had been on an upward trajectory, nosedived. Industry-wide, projections for EV adoption have shrunk dramatically—from an ambitious 50% of new car sales by 2030 under the previous administration to just 17% now, according to Peter Tadros, president of North America powertrain solutions for Bosch, the world's largest automotive supplier.
"That was the target," Tadros said. "Then, over the years, it dropped to 35, to 25, to 17. So now we're at 17% projection for 2030. So a huge, huge gap from the initial projection."
Hyundai Motor Group, which includes the Hyundai, Genesis, and Kia brands, exemplifies the upheaval. Once the No. 2 seller of EVs in the U.S. after Tesla, the company saw its EV sales drop 50% from the first to the fourth quarter of last year, according to José Muñoz, CEO of Hyundai Motor Company. "We still do better than the industry," Muñoz said, "but it had an impact in the industry, which we could clearly see in the fourth quarter."
Hyundai's $12.6 billion Metaplant outside Savannah, Georgia—announced in 2022 and billed as the state's largest-ever investment—originally focused solely on EVs. The facility was rushed to completion to qualify the Ioniq 5 crossover for federal tax credits, which required U.S. assembly and sufficient domestic parts content. Georgia, under Republican Gov. Brian Kemp, led the nation in EV manufacturing investment in 2024, with Kemp declaring his ambition to make the state the "electric mobility capital" of the United States.
But with incentives gone, Hyundai shifted gears. The company announced an additional $2.7 billion investment to boost Metaplant production by 200,000 units annually, aiming for a total output of 500,000 vehicles. Now, the plant will produce a mix of 10 models, including hybrids and gas-powered cars, with Muñoz forecasting 30% EVs and 70% hybrids and gas vehicles. As of January, Hyundai had hired about 1,440 workers at the site, far short of the 8,500 direct jobs and 6,900 supplier positions projected by 2031.
Hyundai's strategy emphasizes flexibility, allowing the same plant to produce multiple models—a approach Muñoz credits for avoiding the financial pitfalls hitting competitors. "The more flexibility you have, the less issues you have with changes in the environment," he said. "So I think, knock on wood, I don't think we're going to see these types of write-offs that we've seen with other competitors."
Not all companies are as optimistic. John Murphy, managing director at Haig Partners, estimates that U.S. automakers could face at least $100 billion in write-downs on EV investments, rendering them unprofitable or worse. "It's the single biggest capital allocation mistake in the history of the automotive industry," Murphy said.
The pain is already materializing. Ford announced in December a $19.5 billion charge on its EV business, which has yet to turn a profit. General Motors followed with a $7.6 billion charge. International players like Honda, Porsche, and Volvo have warned of billion-dollar hits. Muñoz, however, maintains Hyundai will dodge such write-downs through its adaptable production lines, including a new facility in Ulsan, South Korea, capable of making up to 12 models.
Bosch, too, is feeling the squeeze at its factory in Charleston, South Carolina, where it invested $250 million, including in an electric motors division. "Now the investment was not made for 50% market, but it was not made also for 17%," Tadros said. The company reassigned nearly all EV motors staff to other departments producing safety features like electronic stability control and fuel injection systems, which are seeing renewed demand as the industry pivots back to internal combustion engines.
Still, the transition isn't seamless. "You're stranded with this equipment, not producing as many as it should be producing to make up for this depreciation," Tadros explained. "So it's here. It's ready to go. We look forward to making a lot more motors in the future. But right now, it's a difficult situation for that segment." He acknowledged the bet on EVs caused "some pain," but Bosch's diversified operations have cushioned the blow.
The broader implications ripple through the South's economy. The region's automotive heritage dates back over half a century, but the EV boom was poised to supercharge it with unprecedented scale. Now, with sales forecasts a fraction of earlier hopes, factories sit partially idle, and job growth stalls. In Georgia alone, the Hyundai project eclipsed even Rivian's $5 billion facility near Atlanta as the biggest investment in state history.
Experts like Murphy warn that the write-downs signal a reckoning for an industry that overhyped EV demand. Yet, voices like Muñoz's suggest adaptability could salvage some gains. As automakers recalibrate—blending EVs with hybrids and traditional vehicles—the South's manufacturing landscape hangs in the balance, its workers and communities waiting to see if the pivot pays off.
Looking ahead, the EV pullback raises questions about future policy and market directions. With federal support evaporated, states like Georgia continue to court investment, but the enthusiasm has tempered. For now, the factories of the South stand as monuments to ambition, their humming assembly lines a mix of electric dreams deferred and pragmatic reinvention.