Competition between US states to attract transformative electric vehicle (EV) projects is heating up, as economic developers vie to create manufacturing jobs for the future.
In December 2021, Toyota announced plans to invest $1.29bn into its first US battery plant in the centre of North Carolina, creating 1750 new jobs. The Japanese carmaker decided to build its facility on the Greensboro-Randolph mega-site, which was developed through almost a decade of cooperation between local counties.
Local economic development leaders — Brent Christensen of Greensboro Chamber of Commerce and Kevin Franklin from Randolph County Economic Development Corporation — sat down with fDi to discuss the US’s nascent EV supply chain and the importance of incentives and shovel-ready sites to secure transformative projects.
Q: Could you briefly describe the industrial landscape of the Carolina Core and your recent economic development experiences?
Brent Christensen (BC): The central part of North Carolina is what we call the Carolina Core, which includes communities of Winston-Salem, High Point, Greensboro, Guilford County, Forsyth County and Randolph County.
This part of the state has a long manufacturing legacy. It was originally a hub for tobacco, textiles and furniture for many years, until we saw those industries decline substantially with globalisation and free trade agreements. Our challenge in this region has long been how do we reinvent the manufacturing talent that we have in this community.
We lost out on a previous Toyota project in 2018, that wound up going to Alabama. We were, of course, disappointed, but not completely discouraged. We immediately went to work on the mega-site to make sure we were preparing it for the next opportunity.
Q: How important was collaboration on the mega-site for securing Toyota’s battery plant?
Kevin Franklin (KF): I think it’s a unique collaboration. The Carolina Core is an important part of how we market our region, but the development of the mega-site predates that.
The 1900-acre site is actually completely in Randolph Community, which is a rural community without many financial resources. Without the collaboration with our friends in Greensboro, Guildford County, the North Carolina Railroad Company and others, we just wouldn’t have a project. It was really fantastic for us to see that the political boundaries — these artificially drawn lines — stopped mattering. We focused on developing an asset for the region so that we could land a transformational advanced manufacturing project that benefits everybody.
Q: What other success factors helped to attract Toyota?
BC: Firstly, we built a relationship with Toyota from the previous project. We were disappointed to see them go, but we made sure to keep in touch and keep them abreast of the continued progress on the site with regards to permitting progress, power-up upgrades and the like.
We knew that, in many ways, their assessment would come down to where they could build their facility the quickest, so site readiness was a big part of it. We had also been through the process of state incentives, so Toyota knew that we were willing to be strong partners. Quite frankly, incentives and other state support are a big part of these large industrial projects.
Q: How will you ensure value for money for the $435m of incentives offered to Toyota over a 20-year period?
KF: The incentives are predicated on Toyota meeting certain metrics. Plus, there are clawbacks — we’re not just handing away money, willy nilly — it is very intentional. There are established metrics for the state, including job creation and investment, which are vital because, if they don’t reach those goals, they don’t get the incentives.
BC: We know from the process how much studying a company like Toyota does before they make a decision like this. I have very little doubt that this project will be everything that they say it will be, and perhaps more down the line.
Q: What other efforts are being made to develop the entire supply chain for EVs in North Carolina?
KF: In terms of rare earth metals, we have significant lithium deposits in North Carolina. We didn’t have direct conversations with Toyota about proximity to lithium, but I think that is an important component. Toyota intends to manufacture anodes and cathodes onsite.
I think we’re also still trying to understand exactly what that supply chain looks like. Battery manufacturing in the US is still a pretty young production process. But we’re certainly going to be marketing our region to try to bring as much of that as possible to bear.
Brent Christensen is the president and CEO at the Greensboro Chamber of Commerce, while Kevin Franklin is the president at Randolph County Economic Development Corporation. Both are economic development leaders in the Carolina Core region of North Carolina.
If you are a member of the economic development and investment promotion community and would like to be part of the next iteration of the fDi Diaries series, please reach out to fDi@ft.com.