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White House EV investment push especially benefits one region

Mitchell Hartman Jun 23, 2023

The U.S. Department of Energy is driving full speed ahead into the electric vehicle future.

It’s providing a $9.2 billion low-interest loan to automaker Ford and its South Korean partner, SK On, to build three EV battery factories: two in Kentucky, one in Tennessee. The facilities will supply assembly plants in the region that make Ford and Lincoln electric cars and trucks.

This is the biggest loan yet in the Joe Biden administration’s effort to promote renewable energy and develop a full-blown, homegrown EV-production industry. And two states are especially benefiting from this funding: Kentucky and Tennessee.

A lot of public investment is being channeled into building electric battery megafactories in the upper South.

“Battery plants are very large. Making batteries with cutting-edge digital equipment is a big user of electricity,” explained Ned Hill at Ohio State University’s Ohio Manufacturing Institute.

Fortunately, the Tennessee Valley Authority has some pretty cheap power.  

Also, Hill said, “batteries are big, and these suckers are heavy, so they don’t want to truck them a long way.”

The region’s already a hub for car and truck assembly. “Put together cost of electricity, availability of land, just-in-time delivery constraints, and that puts the thumb on the scale,” he added.

Plus, labor in the region is relatively cheap, and so far, it’s proven hard to organize unions there. 

The investment is expected to create 7,500 battery-making jobs and more in support industries. 

Michael Gritton at KentuckianaWorks, a workforce development agency in Louisville, said that in addition to having a trained workforce, “we can reach almost everyone within a day’s drive who lives east of the Rockies. We’re in that logistical center of the country.”

Which China is definitely not. 

“China — for better or worse — is producing the vast, vast majority of batteries as we speak,” said Columbia University climate economist Gernot Wagner. “Well over two-thirds of all lithium-ion batteries currently sold globally are produced in China.”

Wagner said the Biden administration is pumping billions into EV production to try and keep any more of that high-value business from going to China and to prevent the Asian giant from further consolidating its dominance of EV manufacturing and technology worldwide.

But as Wagner pointed out, the U.S. government is lending, not giving, the money to the industry. If all goes well, it’ll be paid back with interest. 

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