Electric Vehicle Uptick Sends Investment to the South

The Great Lakes has been the epicenter of the auto industry, but investment into electric vehicle plants has homed in on the southern states of Tennessee, Kentucky, and Georgia.

Nearly two-thirds of new investment in the first two years of the Biden administration has gone South, not proverbially, according to The Wall Street Journal.

Automakers are making big bets on the EV market, and capitalizing on potential Biden administration subsidies. Globally, there will be $526 billion spent on EVs through 2026, according to AlixPartners consulting firm.

“You have to invest now, or you’re going to be left behind in the transition,” Ford CFO John Lawler told the Journal.

Georgia has invested become a tech company destination and EV manufacturing is making its way there, despite looming fears of an economic recession in the short term.

“I feel like we are right now riding that wave,” Georgia Economic Development Department Commissioner Pat Wilson told the Journal.

The South appeals to new investment because of lower energy cost, along with available and affordable land, according to the report.

Tennessee has an average electricity price of 6.89 cents per kilowatt-hour, compared to 8.38 cents in Michigan, according to 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,” CBRE Group’s Eric Stavriotis, a real estate incentive expert, told the Journal.

Incentives and subsidies from the Inflation Reduction Act are adding to the allure of new investment into the burgeoning industry.

“The greater risk we see is that if you hold back, if you don’t make the investments,” Ford’s Lawler told the Journal. “We can’t put the future on pause.”