From Rust Belt to Battery Belt: Which US State Fits Your EV Manufacturing Needs?
As the global demand for electric vehicles (EVs) continues to surge, non-US manufacturers are faced with the crucial decision of selecting the optimal location for establishing their manufacturing plants in the United States. This choice is influenced by several factors, including existing automotive clusters, government incentives, and the growth of the EV market in different regions. This article will explore the various options and considerations for non-US EV manufacturers to help them make informed decisions.
The "Battery Belt" in the Southeast
One of the most promising regions for EV manufacturing in the US is the Southeast, home to states like Georgia, or North and South Carolina. This region is fast becoming a hotspot for EV production, with an increasing number of major EV battery production and assembly facilities being established here. This growth is largely attributed to the generous incentives offered by these states to attract EV manufacturers.
Georgia, for example, invested a significant $1.5 billion in 2022 to secure the Rivian plant. The state also attracted the attention of the Norwegian battery company Freyr, which is building a $2.6 billion battery factory, with much of its capital expenditure being covered by state incentives.
Michigan - The Automotive Capital
Michigan, located in the Midwest Rust Belt, is known as the automotive capital of the US. It boasts a long history of automotive manufacturing and is keen on maintaining its status by offering substantial incentives. One great success is the recently announced $1 billion investment by GM. Additionally, Michigan is set to be home to GM's Ultium Cells battery plant, further solidifying its position in the EV industry.
Ohio, Kentucky and Tennessee - Auto Alley
Ohio, another Midwest state, has become a focal point for EV battery production. With Honda's $4.4 billion EV battery plant and Ford's significant expansion of its Avon Lake assembly plant, Ohio is signalling its commitment to the EV market. Kentucky, already renowned as the top producer of cars, light trucks, and SUVs per capita, has secured $10.6 billion in new investments from EV-related projects. It is also home to several major assembly plants, including Ford, General Motors, and Toyota. Furthermore, Ford's decision to invest $11.4 billion in a manufacturing complex in Tennessee, along with battery plants in Kentucky, is a testament to the allure of the region for EV manufacturers.
Texas and Arizona - Rising Players
Texas is becoming an increasingly attractive location for EV manufacturers. GM is expanding its presence in the state with its third EV plant, and Tesla's recent announcement of a new site in Austin reflects the growing importance of Texas in the EV industry.
Arizona, on the other hand, is emerging as an EV sales and manufacturing hub. With prominent companies like Lucid, Polestar, Rivian, Tesla, and Atlis Motor Vehicles establishing operations there, Arizona's potential for EV growth is evident.
California - The EV Mecca
California, particularly Southern California, has solidified its reputation as an EV R&D mecca. With companies like Rivian, Lordstown, and Karma already operating in the region, it has become a focal point for next-generation automotive innovation.
Selecting the ideal US state for establishing an EV manufacturing plant is a pivotal decision for non-US manufacturers. While the Midwest Rust Belt and the Southeast "Battery Belt" have strong automotive clusters, the Southeast, in particular, has attracted significant investments and government incentives. Michigan, Ohio, Kentucky, Texas, Arizona, and California also offer unique advantages, each with its incentives, automotive clusters and growing EV markets.
Ultimately, the decision should be based on various factors, such as supply chain considerations, regional incentives, access to skilled labour, and proximity to major markets. Non-US manufacturers must carefully evaluate their priorities and long-term goals to make an informed choice that aligns with their vision for success in the burgeoning US EV market.
