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With two gleaming pickup trucks and the golden dome of Georgia’s capital behind him, Gov. Brian Kemp has announced that a $ 5 billion electric vehicle plant is coming to Georgia.
At the deployment event earlier this month, Kemp called its state the economic engine of the Southeast “and now a world leader in electric vehicles and electric mobility.”
A bold statement, of course, but the Kemp company helped attract Georgia is indeed a big deal. Rivian is one of the most prominent electric vehicle startups. And although it has only produced a few hundred pickup trucks so far, the California-based company is already more valued than Ford Motor Company. Amazon has pledged to purchase 100,000 electric delivery vans from Rivian.
Companies like Rivian are contributing to the electrical future of the automotive industry. When seeking to build new factories, states do everything they can to court them. Sun Belt states like Georgia see an opening to reduce the auto dominance that Michigan and Motor City have cemented for more than a century.
So why did Georgia win Rivian’s dazzling new investment and the 7,500 jobs the company says will come with it?
Well, there is money … a lot. And while the details of Rivian’s deal with Georgia are not yet public, state and local government incentive programs typically include tax breaks, cheap and ready-to-build megasites, upgrades. infrastructure and workforce training.
For context, the Georgian recently landed SK Battery, a South Korean company that is currently building a battery factory, with $ 300 million in incentives.
But that’s not all.
“The growing population, the younger population, the diverse population is what the Midwest doesn’t have right now,” says Nathaniel Horodam of the Atlanta Center for Transportation and the Environment.
He says the auto industry has a growing footprint in the Southeast.
“Whether it’s Kia in Georgia, Toyota, Hyundai Honda in Alabama, BMW, Volvo in South Carolina,” says Horodam.
In all of these states, union strength is weak, which is attractive to many companies.
“It played a major role in reviving the manufacturing sector throughout the southern belt of states,” said Pat Wilson, Georgia’s economic development commissioner, who helped secure the deal with Rivian.
The Sun Belt has attracted other new investments in electric vehicles, especially from startups.
Tesla is building a “gigafactory” in Texas. And Georgia had already landed a large battery factory.
Wilson believes Rivian will attract more suppliers and more electric car makers to Georgia.
“There’s a whole ecosystem that needs to be created in the United States, so every time you form one piece of that ecosystem, it helps the next,” Wilson says.
The ecosystem needed to build cars and trucks already exists, according to Michigan Governor Gretchen Whitmer. And she says it’s in Michigan. Georgia and the Southeast are hardly the only places vying for all of these new investments.
“It’s time to tell the world that Michigan remains the center of high-tech electric vehicle production in the United States,” Whitmer said in September.
Michigan alone attracted more auto investment in the decade after the Great Recession than the South combined. And the state has marked some major electric vehicle projects. GM is expected to invest in a battery plant outside of Lansing, Michigan, and Ford will manufacture fully electric F-150 pickup trucks from its River Rouge plant in Dearborn.
Yet most of the investments made in Michigan so far have been made by traditional auto companies, not dynamic startups. This fall, Michigan launched new incentive programs designed to compete for these projects, spurred in part by losing the Detroit-based Ford and GM electric vehicle investments made in Tennessee and Kentucky.
“The amount of investment going into the auto industry right now is out of the ordinary, and every state is trying to be that future electrification capital,” said Kristen Dziczek, senior vice president of research at the Center for Automotive Research in Michigan.
The Biden administration has set a target for half of all new vehicles to be electric by 2030. While governors can claim their state will lead the future of electric vehicles, Dziczek says it’s the game of anybody.
“We don’t know exactly who owns this landscape,” she says. “That’s why I say to myself, everything is up for grabs.
Whatever geographic reshuffle occurs, it could shape the industry for decades to come.
This new Rivian plant guarantees Georgia, at least, that it will be a real player.