In an era of rising concern over climate change, global economic competitiveness, national security, and energy independence, funding and incentives for electric vehicle (EV) production on American soil have grown astronomically. Investments in US EV and battery manufacturing facilities have increased in part because of the Inflation Reduction Act, a pro-growth climate policy passed by the Biden Administration in 2022 and one of the largest investments in reducing carbon pollution in U.S. history.
The IRA brings with it tax credits and green subsidies to increase production capacity, improve supply chain resilience, and reduce regulatory barriers that impede the efficient functioning of markets in ways that are expected to reduce U.S. emissions ~40% by 2030 while supporting disadvantaged communities and the clean energy industrial base.
While the Midwest has long been the home of the automobile industry, there is rapid migration of the world’s largest automakers to the Deep South, who have set up shop in states like Alabama, Georgia, Tennessee, Kentucky, and South Carolina to build battery and EV manufacturing factories.
As of October 2023, Georgia leads south-east states in EV and battery manufacturing with over $20 billion in EV and battery manufacturing investments, second only to the leading state, Michigan, which has over $24 billion in investments. This trend of increasing investments in the Southeast has outpaced the rest of the country, bringing with it an influx of jobs.
S&P Global credits recent EV expansion in the south to cost factors such as lower wages and unionization rates, generally cheaper electricity and real estate prices, and . future labor needs. EV expansion requires a great deal of labor, and the South has positive population growth trends and an ability to draw residents from around the country that far exceeds that of the Midwest.
Georgia in particular stands out amongst the southern states receiving investments, as it was honored last year with the 2023 City of the Year by the Electric Vehicle Association for initiatives that encouraged electric vehicle use throughout the city of Atlanta. Universities like Georgia Tech have partnered with Hyundai Motor Group to support further battery and vehicle research.
The partnership aims to amplify “EV and hydrogen research, support workforce development and work on sustainability for Hyundai’s EV factory near the Georgia coast and a battery plant in Bartow County.”
At the end of 2023, Electric vehicle manufacturer Rivian sealed a deal on a 1,800-acre site located about 40 miles east of Atlanta where they plan to build a $5-billion, 16-million-square-foot facility under a 50 year lease. If these infrastructure investments continue, the South, and Georgia in particular, is on track to dominate US vehicle production and unseat Motor City as leader of vehicle manufacturing.
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