Today, billion-dollar factories are being built to make the huge batteries that power electric vehicles are announced so often that – even if you follow the auto industry – it’s hard to keep track of them all.
Have you heard about the one from KORE Power in Arizona? Samsung and Stellantis in Indiana? The Chinese project in Michigan, the Norwegian project in Georgia, the Japanese project in South Carolina?
Or, if you’re beyond a billion-dollar awe, how about the $5 billion electric vehicle and battery project in Georgia? No, not that one – the other a.
All of these plants – plus even larger ones from Ford and General Motors – are part of a remarkable industrial shift.
Automakers are gearing up for electric vehicles, currently about 6% of new vehicle sales in the United States, to capture massive market share in just a few years. This means that companies will need a huge amount of batteries.
The Atlas Public Policy think tank recently tallied up all announced projects in the United States, as part of research backed by a trade alliance of automakers, and provided updated numbers to NPR in December. All told, the group counted more than $128 billion in announced investments in electric vehicle, battery manufacturing and battery recycling plants.
In 2022 alone, companies announced more than $73 billion in planned projects — more than three times the previous record, set in 2021.
Outside of the battery belt, production is expanding to many parts of the US
Political pressure is being put on companies involved in battery production to reduce dependence on China and create American jobs. China currently hosts as much as 90% of global production of some key battery components.
But there are also business reasons for moving to the US, as companies look to expand production quickly and avoid supply chain disruptions.
“It helps us with logistics costs, it helps us with material costs,” Then-President of Volkswagen of America Scott Keogh told NPR last January about moving production to the United States. “It will be a dramatic, dramatic, dramatic help to have the supply chain located, to have the car here and, frankly, just to have enough production slots.”
In the last year, the company has opened a new electrical assembly line at its Chattanooga plant ($800 million conversion cost), using batteries sourced from a new SKI plant a few hours away in Georgia ($2.6 billion price tag).
Many of the new US projects are going to the Southeast, earning the region the nickname “battery belt.” But Tom Taylor, an analyst at Atlas, says the trend is broader geographically than that.
“We’ve seen announcements … all over the country, and not just announcements, but really big announcements,” he says. “In some states [these are] some of the largest, if not the largest, economic development projects in the state’s history.”
All told, companies say those factories will create more than 150,000 direct jobs, according to Taylor.
Now comes the hard part… opening the plants
It is much easier to announce a new battery factory than to actually open one. Tesla, a pioneer of this type of plant, is currently facing headwinds at its new Berlin Gigafactory.
And while GM successfully opened a new battery plant in Ohio, CEO Mary Barra had to defend the slow pace of production there during a recent call with investors.
“Let’s take a step back and recognize that the Ohio plant is the size of 30 football fields and will employ more than 1,000 people,” she said. “Making sure all our people were there and trained has taken a little longer than expected.”
Given the challenges of executing such large projects, it’s reasonable to view any announced numbers with a tinge of skepticism.
And that’s especially concerning to some critics, because not all of those billions of dollars come from corporations — much of it is paid for by taxpayers.
Nearly $14 billion in state and local subsidies went to electric vehicle and battery plants this year, according to the subsidy watchdog group Good Jobs First, which has criticized both the size of the subsidies and the lack of transparency surrounding them.
But proponents and critics agree on one thing: Large amounts of money are likely to flow into new U.S. battery factories for a while.
Most of the announcements Atlas recorded predated a national climate law passed this summer that included major incentives for electric vehicle production in the US.
Given that “it’s a reasonable assumption that that number will continue to rise,” Taylor says.
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