#112 – Inside Our Industry – The Motor City is moving south as EVs change the automotive industry
Posted on | Inside Our Industry
Following is part of a great article our VP of Development in Agracel’s Southeast office, Richard Blackwell, shared with our team. It is a trend we are seeing as well. Click on the link at the bottom for the full story along with some very impressive graphs.
The Motor City is moving south as EVs change the automotive industry
Michael Wayland | CNBC | AUG 14, 2022
Detroit is the city that “put the world on wheels,” but it’s towns like Spring Hill (TN) and others in neighboring states that are attracting the most investments from automakers in recent years, as production priorities shift to a battery-powered future with electric vehicles.
Companies more than ever want to build EVs where they sell them, because the vehicles are far heavier and more cumbersome to ship than traditional models with internal combustion engines. They also want facilities for battery production to be close by to avoid supply chain and logistics problems.
Among the first to invest in southern states was Ford Motor in the 1950s and 1960s in Kentucky, followed by foreign-based, or transplant, automakers starting with Nissan Motor, which established a plant in Smyrna, Tennessee, in 1983. Others such as General Motors, Subaru, Toyota Motor and BMW followed suit through the 1990s. More have followed since then, including recent announcements by Hyundai Motor and Rivian Automotive to build multibillion-dollar plants in Georgia.
As more companies look to the American South, the investments are changing the landscape of towns across the region and of the automotive industry’s workforce, supply chain and logistics. Companies first to set up shop in the South earn early advantages over their northern competitors, and future newcomers, according to officials.
Auto executives say they’re investing in the South for a combination of reasons: lower energy costs, available workforce and livability among them. Many southern states also come with other benefits, potentially controversial, such as all-in lower pay for workers, millions in tax breaks and a largely non-unionized workforce in many of the Republican-controlled, right-to-work states.
Automakers have announced $45.9 billion of investments in southern states since 2017, according to The Center for Automotive Research, a nonprofit think tank based in Ann Arbor, Michigan. That’s the first year the South outpaced the Midwest, or Great Lakes region, for announced investments since at least 2010.
Midwest states such as Michigan, Ohio and Indiana saw $39.9 billion in announced investments in that same timeframe.
Most of the money heading south – $34.2 billion, or 74% – has come in since last year from traditional automakers such as GM, Hyundai and Ford Motor as well as EV startup Rivian. Others such as Volkswagen and Nissan continue to invest and expand their operations in the South, largely for new electric vehicles.