Hyundai broke ground this week on a £1.5bn EV plant in the South Korean city of Ulsan, its first new domestic plant for 29 years.

The world’s third largest car-maker by sales, Hyundai said the 548,000-sq-m plant will have an annual capacity of 200,000 units when it enters production in the first quarter of 2026.

The first marque to be assembled there will be the Genesis SUV.

Ulsan is Hyundai’s home town, and is already home to five of its facilities. Together, they form the world’s single largest automobile plant.

According to Hyundai, the plant will be “people-centric” and will use “innovative manufacturing platforms, with optimal working conditions for safety and efficiency”.

Speaking at the groundbreaking ceremony, Young-jin Jang, Korea’s deputy trade and industry minister, said, “I believe Hyundai Motor will stand out as a powerhouse in the electric vehicle era with decisive investments.

“The government will prioritise supporting the improvement of the business investment environment, including bold tax incentives, and eliminate regulations that inhibit economic growth.”

Other automotive companies have recently slowed down their investment plans, fearing a tailing off in demand for EVs. Tesla, General Motors, Ford and Toyota have all taken their foot off the EV accelerator in recent months

However, Euisun Chung, Hyundai’s executive chair, said his company was monitoring sentiment in the EV market, but believed the trend was positive regardless of issues over a shortage of charging infrastructure.