#163 – Inside Our Industry – A Second Wave of EV InvestmentPosted on
The huge mega-sites for electric vehicle assembly and electric vehicle battery cells have garnered much attention over the past year. Now we are starting to learn of the “second wave” of EV investment, which typically requires smaller sites. Shovel-ready sites will be top on the site selection list. The following is from AreaDevelopment.com.
Last Word: A Second Wave of EV Investment
The rapid transition of the auto industry from internal combustion engine vehicles (ICEs) to electric vehicles (EVs) has set off a rush of new investment in new EV assembly plants and battery cell plants.
Dennis Cuneo, Director, Site Selection Services, Walbridge; Larry Filson, Ass’t VP, Design and Sustainability, Walbridge; Q2 2023
Over 20 multibillion-dollar EV-related plants have been announced over the past two years in the United States. With the passage of the Inflation Reduction Act and proposed new vehicle emissions standards, additional EV assembly and battery plants will likely be required — but not all communities will have sites large enough to host these projects.
Most of the sites that host new EV assembly and battery plants are in excess of 1,000 acres. Economic development agencies at the state and local level face real estate and related issues in trying to assemble suitable sites. Putting together a 1,000+ acre site with requisite utilities and logistics is not an easy or cheap task.
The good news for economic developers is that the industry is experiencing a second wave of EV investment, such as battery component plants, which require less land and still offer huge economic development opportunities. For example, Entek recently announced a $1.5 billion battery component plant in Terre Haute, Indiana, that will produce battery separator materials. The plant, which will employ 642 people, will be located on a 340-acre site in an industrial park. Similarly, a $3 billion battery cathode plant will be built by LG Chem on a 420- acre site in Clarksville, Tennessee, and will create 860 new jobs.
To be sure, even though these battery component projects may require less acreage, site selectors will be looking for sites that are shovel-ready, or close to shovel-ready. That means a site that:
* Is under public ownership or with an option-to-purchase;
* Has all the requisite environmental, wetlands, archeological, and similar studies completed, with any required mitigation in place;
* Is zoned for heavy industrial use, with no nearby conflicting uses, such as residential;
* Has the necessary utility capacity (high voltage electricity, natural gas, water, wastewater, fiber) and adjacent hookups that will be in place before the plant’s start of production;
* Is in close proximity to an interstate or interstate-quality highway, with plans, easements, and budget for access roads (and some projects may require direct rail access);
* Has sufficient workforce availability and skills within a 60-minute commute;
* Is close to a city with amenities to attract a management team;
* Is within an hour’s drive of a commercial airport that offers regularly scheduled airline service to one or more airline hubs; and
* Has a competitive state and local incentive package.
To be in the hunt for this second wave of EV-related projects, communities need shovel-ready sites. The process of assembling such a site takes time and resources. For those communities that score a billion-dollar project, the economic payoff is huge.