The southern US has become a popular region for companies in the electric vehicle (EV) supply chain, with a string of recent large investments made by foreign and domestic players.
Among the winners is the state of Georgia. In November 2021, the German metal recycling specialist Aurubis announced plans to invest $340m into a facility in Augusta, where it will produce the materials found in lithium-ion batteries. SK Innovation is also investing $2.6bn into two EV battery facilities near the Georgian city of Commerce.
Pat Wilson, who has served as commissioner of the Georgia Department for Economic Development since November 2016, sat down with fDi to discuss the importance of developing an EV value chain in the US and the role of workforce training in attracting companies.
Q: What are the main challenges in developing an US EV supply chain?
A: The biggest issue is that the supply chain doesn’t exist right now. Even if you are looking across the world — 77% of lithium-ion batteries are produced in China, along with 83% of the anodes and over 60% of the cathodes used in them. Even further up the supply chain for rare earth minerals, almost all of them come from outside the US.
We are starting from scratch to build a supply chain to power the future. It is probably one of the most daunting tasks, but it also provides a huge opportunity for countries looking to grow the jobs of the future.
Q: A big concern is the potential job losses from the transition to EVs. How will this affect Georgia?
A: We’re a state that is very reliant on the automotive industry. We have Kia building cars here in Georgia, but also a massive supply chain for that key facility and other original equipment manufacturers in close proximity, such as BMW, Volkswagen and Mercedes Benz. We have around 55,000 people in the automotive industry, and most of those are working with the internal combustion engine (ICE).
As a government recruitment agency, it is incumbent upon us to make sure we are helping everyone transition into the economy of the future.
Governor Brian Kemp created the Electric Mobility and Innovation Alliance in July 2021 for this purpose — pulling the private and public sectors together, including our university and technical college system. The job of this alliance is to help with the connections and resources at our university system to make the transition from ICEs to EVs.
Q: In November 2021, Aurubis announced a $340m investment into a metal recycling facility in Augusta, Georgia. What makes this project so significant?
A: Aurubis has announced a project that will create 125 jobs and bring $340m of investment, which is the largest single investment by a German company ever in Georgia.
This project is the first-of-its-kind, taking copper waste in the US, recycling it and turning it into a usable product on the back end. At the same time this will extract other minerals in the supply chain that can be reused throughout industry. This is a major step in the right direction, creating an entire value chain in the US.
You will find in every one of these projects — whether it be in natural resources, recycling or automotive — that it’s a very aggressive market right now for job growth. Every US state is focused on this transition.
Q: Has finding a workforce become the primary concern for companies undertaking these types of projects?
A: We used to say people follow good jobs. Now good jobs follow people.
As a state, you have to show how you are going to meet the long-term needs of companies. If you look south, for the most part, growing jobs has been a top priority of states for a number of years. The unemployment rate across the south is very low — below 4% in pretty much every state.
In this context, being able to meet the long-term workforce needs of companies that are moving in becomes, if not number-one, the number-two issue in site selection. We want Aurubis to be able to hire an initial 125 people. But we are also looking at long-term growth. You are only as prosperous as a company as the employees you are able to find.
Q: What keeps you up at night as an economic developer?
A: I’ve answered this question the same way for several years: it’s making sure that we have the people and the skills we need in order to meet the needs of the jobs of the future. I think that we’re doing everything we can to continue to focus on that and attack the issue. The only thing that can slow the momentum right now is the fact that we need more people.
Pat Wilson is commissioner of the Georgia Department of Economic Development.
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