top of page
  • snitzoid

Huge building boom for EV auto plants. 2/3rds in America's South.

Shift to EVs Triggers Biggest Auto-Factory Building Boom in Decades

Car industry has earmarked billions for EV projects—much of it directed to the South

By Nora Eckert, WSJ

Jan. 1, 2023 5:30 am ET

The U.S. auto industry is entering one of its biggest factory-building booms in years, a surge of spending largely driven by the shift to electric vehicles and new federal subsidies aimed at boosting U.S. battery manufacturing.

Through November, about $33 billion in new auto-factory investment has been pledged in the U.S., including money for the construction of new assembly plants and battery-making facilities, according to the Center for Automotive Research, a nonprofit organization based in Michigan.

The 11-month total adds to the $37 billion in new auto-factory spending committed in 2021, when a number of new projects were revealed in states such as Tennessee, Kentucky and Michigan. The annual figure is up from $9 billion in 2017 and a more than eightfold increase from two decades ago, the center found.

About two-thirds of the new auto investment revealed over the past two years is going to sites in the U.S. South, the data shows, tilting activity farther away from the Great Lakes region, the auto industry’s stronghold for a century.

The race by auto makers to populate their lineups with electric vehicles is the biggest factor behind the factory-spending spree. The federal climate package passed in 2022 is likely to further accelerate U.S. investment, earmarking tens of billions of dollars to subsidize EV and battery factory projects, as well as facilities for processing battery materials such as lithium and graphite.

Some foreign-owned car companies are targeting the U.S. for expansions, an offset to weakness in other global markets. Meanwhile, freshly capitalized EV startups, including Rivian Automotive Inc., are building out their manufacturing capabilities.

Rivian, which began building vehicles in Illinois in 2021, has committed to a second factory in Georgia to open in 2026. Hyundai Motor Co. has revealed plans for a $5.5 billion factory complex in the state, as well.

The capital outlays amount to a collective bet by the car industry that buyers will embrace battery-powered models in numbers large enough to support these investments. The global auto industry plans to spend a collective $526 billion on electric vehicles through 2026, according to consulting firm AlixPartners.

“You have to invest now, or you’re going to be left behind in the transition,” said John Lawler, chief financial officer for Ford Motor Co.

The wager is made riskier by signs of a possible economic downturn that could weigh on consumers’ willingness to splurge. Still, company leaders say they are confident the manufacturing investments will fuel their futures long beyond a potential recession. State officials see it as a once-in-a-generation chance to bolster local economies and secure jobs.

Rivian is under pressure to prove it can build its electric trucks at scale without having ramped up production before, as competition heats up from legacy auto makers. WSJ toured Rivian’s and Ford’s EV factories to see how they are pushing to meet demand. Illustration: Adam Falk/The Wall Street Journal

Southern states such as Georgia, Tennessee and Kentucky have emerged as some of the biggest winners in the battle to land new auto-factory projects.

Pat Wilson, commissioner for Georgia’s economic development department, said this isn’t by coincidence. Georgia had spent years investing in technical colleges and prepping project sites to attract car companies, he said.

“I feel like we are right now riding that wave,” Mr. Wilson said.

State leaders in the South have pitched the advantages of lower energy costs and an abundance of developable land, analysts and site selectors say. Car companies are also looking for shovel-ready sites, where certain infrastructure, such as roads and utilities, is in place. This prep work helps speed up factory construction.

Energy costs are a significant factor in choosing a battery-plant site because these facilities are big energy consumers. Tennessee, for instance, had an average electricity industrial price of 6.89 cents per kilowatt-hour, compared with 8.38 cents in Michigan, according to October 2022 data from the U.S. Energy Information Administration.

“There’s no question that some of the markets in the Southeast have figured out a great secret sauce, in terms of how to court those big projects,” said Eric Stavriotis, the head of location incentives for CBRE Group, a Dallas-based real-estate company.

Within the past year, the rush to move more of the battery-making supply chain to the U.S. has also led to many new factory projects, many expected to open in the next few years.

Most EV batteries today are made in Asia. But the cost of transport, coupled with the risks of relying on overseas suppliers, has prompted more car companies to localize battery manufacturing.

The Inflation Reduction Act further hastened efforts to increase domestic output. It offers billions of dollars in manufacturer incentives for domestic battery production, and limits a federal tax credit for EV buyers to vehicles with batteries and their mineral components sourced in North America or from trade-friendly countries.

In the past year, General Motors Co. opened a new battery factory with LG Energy Solution in Ohio and is developing two more, in Tennessee and Michigan.

Panasonic Holdings Corp. said over the summer that it would build a $4 billion battery factory in De Soto, Kan. Ford, Toyota Motor Corp. and Jeep-owner Stellantis N.V. also have multibillion-dollar battery-factory projects in progress.

The investments are in contrast to other belt-tightening moves made in recent months as auto executives prepare for a possible downturn. Some car companies have laid off workers or restrained hiring. Stellantis said last month that in February it is indefinitely idling a 1,350-employee assembly factory in Illinois that makes the Jeep Cherokee.

Ford’s Mr. Lawler said despite recessionary concerns, auto companies can’t be shortsighted in their EV-related investments. Ford has multiple factory projects under way, including in Tennessee and Kentucky, and plans to invest $50 billion in EVs through 2026.

“The greater risk we see is that if you hold back, if you don’t make the investments,” he said. “We can’t put the future on pause.”

Write to Nora Eckert at

6 views0 comments

Recent Posts

See All

Which network gets the most Emmy nominations!

It's bad enough that I've been overlooked every year for the Pulitzer which I richly deserve, BUT I've won exactly zero Emmy awards. The whole award deep state is run by a bunch of Illuminati whose a


Post: Blog2_Post
bottom of page