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US battery and EV plants galore – Richard Mills

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  • US battery and EV plants galore – Richard Mills
November 1, 2022

2022.11.01

According to data collected by The Book of Deals, via cargroup.org, in 2021 automakers announced $36 billion of investments to build facilities dedicated to manufacturing EVs and batteries. In the first five months of 2022, automakers announced $24 billion in EV-related investments, almost double the investments announced by the same time last year. Recent automaker announcements on EV and battery manufacturing investments demonstrate an acceleration of growth in the EV market driven by new government EV targets and increasing consumer demand.

Announced automaker investments in North America. Source: Center for Automotive Research

State-directed funding for vehicle electrification has been made available through President Biden’s American Rescue Plan, a $1.9 trillion funding package to help US states, territories, cities and tribal governments replace tax revenue lost during the pandemic. According to a recent Bloomberg piece, hundreds of billions in federal aid was made available to states but never spent.

Michigan took advantage by announcing a $6.6 billion electric-truck factory and battery plant from General Motors, along with a billion in corporate subsidies. The announcement came soon after rival Ford made public that it had chosen two southern states, Tennessee and Kentucky, as sites for an $11 billion electric-vehicle project.

The Bloomberg article quotes an expert saying that, while states have long competed against one another to lure companies, the scale and the ferocity of it now — for EV plants, semiconductor factories and other megaprojects — are unprecedented.

“I have never seen the same kind of surge in subsidies all across the US all happening at the same time,” said Michael Farren, a senior researcher at the Mercatus Center at George Mason University and a critic of corporate incentives. “It’s pretty clear that there’s an external motivating factor, and that is the American Rescue Plan relief funds.”…

The $350 billion that Congress set aside for states and municipalities in May 2021 is coinciding with a once-in-a-century transformation of the auto industry, as carmakers prepare to retire the combustion engine in favor of battery power…

What is known is that global carmakers and established battery manufacturers have announced plans to invest at least $50 billion into at least 10 states to build EV assembly and battery plants since the start of 2021, and states have made commitments totaling at least $10.8 billion to lure those investments, according to a tally of publicly disclosed incentives by Bloomberg and Good Jobs First. That figure almost certainly underestimates the actual number.

Arun Kumar, a managing director at consulting firm AlixPartners, forecasts a 54% EV market share globally by 2035, and suggests that at such volumes, more EV plants will be coming to the United States.

Tennessee and Georgia exemplify how state-corporate collaboration is working to create the downstream part of a critical minerals supply chain. At Blue Oval City, a six-square-mile site an hour’s drive from Memphis, an assembly plant is being built to produce Ford’s new electric F-150 pickup, and a battery plant that together promise to create nearly 6,000 jobs. State officials say the $5.6B project will add $3.5B annually to Tennessee’s economy. A cash grant from the state legislature totals at least $2.4 billion, which includes tax breaks, donated land, infrastructure improvements and short-term wage subsidies from the federal government, according to contract documents obtained by Bloomberg.

Source: Ford

In June, Volkswagen America opened a $22 million Battery Engineering Lab, a 32,000-square-foot facility located next to its Chattanooga, TN plant. ABC News said the company’s compact ID.4 SUV, currently imported from Germany, will roll off assembly lines for US consumers later this year. VW has reportedly invested more than $800 million to prepare its Chattanooga plant for the local assembly of the ID.4 SUV in 2022.

Source: Volkswagen
Source: Volkswagen

Georgia, meanwhile, has landed two $5B EV deals from Rivian and Hyundai. The state offered incentives worth $3.3B to win the projects, which promise to create over 15,000 jobs.

Mercedes-Benz’s Bibb County, Alabama plant joins the carmaker’s global battery production network with factories on three continents. The German company has said it will go all-electric by 2030, with plans invest 40 billion euros into BEVs from 2022-30.

Source: Mercedes-Benz

Rival BMW in 2019 expanded its battery facility at Plant Spartanburg, South Carolina, more than doubling capacity. According to ABC News, Higher performing, fourth-generation batteries are assembled on-site for the BMW X5 and BMW X3 plug-in hybrid electric variants and 120 employees were specially trained to work the new line, having completed an extensive program in battery production, robotics and electrical inline quality inspection along with end-of-line testing, BMW said.

Source: BMW

Of course we can’t forget about Tesla, the country’s top seller of EVs. The company produces batteries and electric motors for the Model 3, at is Sparks, Nevada plant, which broke ground in 2014. The company says the site currently produces more batteries in terms of kilowatt-hours than all other carmakers combined.

As for future developments, 13 electric-vehicle battery factories are planned in the United States between 2021 and 2026, according to the table below by the Department of Energy. This is in addition to battery plants that are already in operation. Of the 13 new plants, eight are joint ventures between automakers and battery manufacturers. Many will be located in the US Southeast or Midwest.

Source: US Department of Energy

Fourth down on the list, General Motors and Korean battery-maker LG Chem are teaming up to build three US EV battery factories with a $2.5 billion loan from the US Department of Energy. Known as Ultium Cells, the joint venture will open a new 2.8 million-square-foot facility in Lansing, Michigan, its third battery cell manufacturing plant in the country. Workers will supply battery cells to Orion Assembly in Michigan and other GM EV assembly plants. Production at the Ohio plant was to begin in August, with the Tennessee plant expected to open in late 2023 and the Michigan plant in 2024.

Another JV, between Stellantis and Samsung SDI, plans to build an EV battery plant in Kokomo, Indiana, targeting a 2025 launch with a total investment of $2.5B.

Stellantis also announced a $4 billion investment with LG Energy Solution to build an EV battery plant in Windsor, Ontario.

Tesla supplier Panasonic earlier this year announced it will build a new lithium-ion battery factory in De Soto, Kansas. Reuters said the $4 billion plant will mostly supply batteries to Tesla, but not exclusively.

Hyundai recently said it plans to spend $5.5 billion to build facilities for  manufacturing EVs and batteries in Savannah, Georgia, making it the automaker’s first EV-only plant in the United States.

Richard (Rick) Mills
aheadoftheherd.com
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