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Automakers look South to build electric vehicle batteries

You won’t find many electric vehicles on the back roads of Alabama and Tennessee, but thousands of residents in those states are building them to meet growing demand.

Automakers such as Mercedes-Benz, Ford and Volkswagen are investing billions of dollars in high-tech factories that will provide the batteries needed for the transition to electric vehicles.

Last month, Volkswagen of America opened a $22 million Battery Engineering Lab (BEL), a 32,000 square foot facility near its factory in Chattanooga, Tennessee. Lab engineers test batteries for safety, durability and quality in extreme weather conditions and the company’s ID.4 compact SUV, currently imported from Germany, will roll off the assembly lines for US consumers later this year. More than 4,000 workers are employed at the Chattanooga plant, and Volkswagen plans to hire 1,000 new production team members by the end of the year.

Producing batteries locally “makes us faster,” Wolfgang Maluche, vice president of engineering at Volkswagen of America, told ABC News. “Chatanooga [will] become Volkswagen’s hub for electric mobility in the United States.”

PHOTO: Volkswagen has invested more than $800 million to prepare its Chattanooga plant for local assembly of the ID.4 SUV in 2022.

Volkswagen has invested more than $800 million to prepare its Chattanooga plant for local assembly of the ID.4 SUV in 2022.

volkswagen

According to Arun Kumar, managing director of consulting firm AlixPartners, which forecasts a global electric vehicle market share of 54% by 2035, more battery factories are coming and southern states will continue to benefit.

“The Southern states are definitely aggressive… 46% of vehicle production in the United States right now happens in the South. It’s no surprise to me that more investment is going there,” Kumar told ABC News. “This is just the beginning. The era of electric vehicles is real.”

Gil Tal of the UC Davis Institute for Transportation Studies said southern states are “fighting hard” to be chosen by automakers, offering attractive tax incentives and favorable investment packages. As the Biden administration pushes consumers toward electric vehicles, setting an ambitious goal of making half of all new vehicles sold electric by 2030, Tal, like Kumar, expects automakers to diversify their Supply Chain.

“Demand is growing for electric vehicles and there will be new regulations that force their sale,” Tal told ABC News. “Battery production is changing and getting better and becoming more efficient. Any company that sells a significant amount of cars in the United States will build battery factories here.”

PHOTO: A climate chamber for testing electric vehicle batteries at Volkswagen of America's Battery Engineering Lab in Tennessee.

A climate chamber for testing EV batteries at Volkswagen of America’s Battery Engineering Lab in Tennessee.

volkswagen

Producing these high-tech batteries in the United States solves many of the headaches that have plagued automakers in recent years, Kumar explained. Tesla, the nation’s top seller of electric vehicles, produces batteries and electric motors for the Model 3 at its Gigafactory in Sparks, Nevada, which opened in June 2014. The site currently produces more batteries in terms of kWh than all the others. automakers combined, making it the largest battery factory in the world, according to Tesla.

PHOTO: The new Mercedes-Benz battery plant in Bibb County, Alabama.

The new Mercedes-Benz battery plant in Bibb County, Alabama.

Mercedes-Benz

Mercedes, which has said it will go all-electric by the end of the decade, will invest more than 40 billion euros in battery-electric vehicles between 2022 and 2030. Bibb County plant joins network global battery production company with factories on three continents.

PHOTO: Mercedes-Benz's new battery plant produces all battery systems for the EQS and EQE large SUVs, which are manufactured exclusively in the USA

Mercedes-Benz’s new battery plant produces all battery systems for the EQS and EQE large SUVs, which are manufactured exclusively in the USA

Mercedes-Benz

In September, Ford Motor announced it would build twin battery plants in central Kentucky to power a new line of Lincoln and Ford electric vehicles. Another drum campus in Tennessee will focus on next-generation F-Series electric pickups like the F-150 Lightning. The two projects will cost $11.4 billion and create nearly 11,000 new jobs, Ford said. The Dearborn automaker expects 40-50% of its global vehicle volume to be fully electric by 2030.

PHOTO: The new Ford F-150 Lightning electric truck is tested in Boston on June 11, 2022.

The new Ford F-150 Lightning electric truck is tested in Boston on June 11, 2022.

John Tlumacki/Boston Globe via Getty Images

At the end of 2019, BMW expanded its battery plant at the Spartanburg plant in South Carolina, doubling its battery assembly capacity. More efficient fourth-generation batteries are being assembled on site for the BMW X5 and BMW X3 plug-in hybrid electric variants and 120 employees have been specially trained to work on the new line, having completed an extensive program of battery production, robotics and electricity online. quality inspection as well as end-of-line testing, BMW said.

PHOTO: Fourth-generation high-performance batteries are assembled at BMW's South Carolina plant for the X5 and X3 plug-in hybrid electric variants.

Fourth-generation high-performance batteries are assembled at BMW’s South Carolina plant for the X5 and X3 plug-in hybrid electric variants.

BMW

States in the traditional “car belt” are still vying for investment dollars from automakers. Panasonic, one of Tesla’s main suppliers, announced this week that it will build a new US lithium-ion battery cell factory in De Soto, Kansas, investing $4 billion and creating up to 4,000 new jobs. The factory will mainly supply batteries to Tesla, but is not limited to the company, Reuters reported.

Stellantis has announced that it will build an electric vehicle battery plant in Kokomo, Indiana, with its partner Samsung SDI. The plant, scheduled to launch in 2025, would create 1,400 jobs in and around Kokomo, Stellantis said, for a total investment of $2.5 billion.

Ultium Cells, a joint venture of LG Energy Solution and General Motors, will open a new 2.8 million square foot plant in Lansing, Michigan, its third battery cell manufacturing facility in the country. At least 1,700 manufacturing jobs will be available at the site, and workers will supply battery cells to Orion Assembly in Michigan and other GM EV assembly plants.

Automakers’ southerly shift and intense focus on electric vehicles has some longtime workers in the industry worried about their future. According to Kumar, electric vehicles require 40% fewer powertrain assembly hours than a gas-powered vehicle. Workers with basic skills in combustion engine technology would need significant retraining to work in a battery factory, he noted. Electric vehicles in general are less complicated to manufacture, not very labor intensive, and many parts of the process are automated.

“Workers are worried about job security and fear their sons and daughters won’t have jobs” in the industry, said Erik Gordon, a professor at the University’s Ross School of Business. from Michigan. “Working in a car factory is often a family affair – and they are great jobs.”

The United States can be considered a laggard in EV battery production compared to China, where EVs quickly caught on with consumers and government leaders who viewed batteries as an essential industry. Gordon argued that automakers are tackling U.S. battery production at the right time and that any sooner could have been a foolhardy move.

“People would have laughed 10 years ago if automakers had wanted to build these factories,” Gordon said. “They would be obsolete today. The underlying technology is changing so quickly and for the better.”

What will happen to these factories and the workers if electric vehicle sales in the United States slow down in the next five or ten years?

“Interest in electric vehicles will not die out,” Tal said. “Automakers have a secure market for electric vehicles. All of these investments are not going away.”

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Post expires at 10:59pm on Friday July 22nd, 2022