Major automakers and battery manufacturers have outlined their largest-ever investment campaigns across the US, as the race for electric vehicle (EV) supremacy in the world's largest economy intensifies.
Since the beginning of 2021, EV-related manufacturing projects worth more than $19.6bn have been announced in the US, according to the latest data from fDi Markets, which tracks greenfield investments made by foreign companies and firms based in another US state.
On January 25, General Motors (GM) became the latest player to announce ambitious EV capacity expansions. The Detroit-based carmaker will invest more than $7bn into four Michigan manufacturing sites, creating 4000 new jobs and retaining a further 1000 roles.
“Our plan creates the broadest EV portfolio of any automaker and further solidifies our path toward US EV leadership by mid-decade,” said Mary Barra, GM’s chair and CEO.
GM’s latest pledge includes $2.6bn towards a third US battery cell manufacturing plant as part of Ultium Cells, its joint venture with South Korea’s LG Energy Solution. Ms Barra says GM intends to make its home state the “epicentre of EVs” through its mix of manufacturing, research and development (R&D) and headquarters operations.
US president Joe Biden aims to have half of all new vehicles sold in the US to be zero-emissions by 2030 and has proposed increasing EV tax credits by a third for US consumers to buy American union-made vehicles.
Several other US states have experienced an EV windfall too. Legacy carmakers, as well as start-ups like Rivian, have announced multi-billion dollar battery and assembly plants for their new electric models – which they hope will take market share away from current EV leader Tesla.
While the US only has four active megafactories for lithium-ion batteries, including two operated by Tesla, a further 17 are in planning or construction, according to Benchmark Minerals Intelligence, a specialist information provider for the EV supply chain.
Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, tells fDi that almost every legacy automaker now has joint ventures or close working relationships with battery cell manufacturers for their lofty electrification strategies.
One such partnership is a 50-50 joint venture between Ford and SK Innovation called BlueOval SK. The companies plan to invest a combined $11.4bn into an assembly and battery complex in Tennessee, as well as another two battery plants in Kentucky.
“This is our moment – our biggest investment ever – to help build a better future for America,” said Jim Farley, Ford’s president and CEO, upon announcing the plans in September 2021. The projects are expected to create close to 6000 jobs in Tennessee and a further 5000 jobs in Kentucky.
Foreign carmakers also have bold electrification plans to enter the North American EV market. This includes Netherlands-based Steallantis, which plans to build two battery plants as part of a joint venture with Samsung SDI, but is yet to decide a location.
The latest fDi Markets data show the US attracted more inbound foreign EV-related investments than any other country in 2021, including China, the UK and Germany.
At a 1900 acre mega-site between the counties of Greensboro and Randolph in North Carolina, Japan-based Toyota will invest $1.29bn into its first US battery plant, which is expected to come online in 2025.
“Site readiness was a big part of [securing the Toyota project],” said Brent Christensen, the CEO of Greensboro Chamber of Commerce who was involved in the project. An incentive package of more than $435m over a 20-year period was also offered to the Japanese carmaker.
Despite North Carolina having large deposits of lithium, a key ingredient needed for most EV batteries, other local economic developers admit the EV supply chain is still nascent.
“Battery manufacturing in the US is still a pretty young production process,” said Kevin Franklin, president of Randolph County Economic Development Corporation. “We’re still trying to better understand exactly what the supply chain looks like.”
The US currently has 702.6 GWh of battery cell capacity in the pipeline to come online by 2031, according to Benchmark Mineral Intelligence, while China has 3400 GWh – almost five times as much.
“The US needs to develop its own lithium-ion economy if it wants to remain at the forefront of technology and manufacturing,” said Mr Rawles.
He added that automakers have also neglected corresponding investments into battery raw materials, like lithium and cobalt, for which prices have soared. In the year to December 2021, the benchmark price of lithium rose by 280%, according to Benchmark Mineral Intelligence.