The Southeast: Why EV & Battery Manufacturers Are Moving to the Region

The last edition featured information about clean energy job growth in Tennessee in 2022. After writing it, I was curious about why clean energy jobs are proliferating in Tennessee and across the region. To learn more, I interviewed Stan Cross, the Electric Transportation Policy Director at the Southern Alliance for Clean Energy. 

The organization has produced a report titled Transportation Electrification in the Southeast that highlights some of the statistics around EVs in the region, including employment, investment, and public funding. Here are a few interesting facts: 

• There was 60% growth in jobs from July 2022, with 65,392 jobs related to EVs

• $60 billion has been invested, representing 98% growth since July 2022

• The southeast is poised to be a leading EV manufacturing hub in the US

• Georgia has the most announced EV jobs in the country with 27,817

Stan says that the Inflation Reduction Act (IRA) and the requirements it has for batteries and EVs to be made in America in order to qualify for tax incentives is driving “a tremendous amount of on-shoring.” Companies are moving here from other places, and US companies are coming back—and the southeast offers four key elements that appeal to such companies: access to cheap electricity, water, and land; a pro-business political climate; weaker labor laws; and access to talented workers.

1. Electricity, Water, and Land  

Big manufacturing companies need power. Energy rates in the southeast are low (though it may not feel like it to consumers) mostly thanks to the Tennessee Valley Authority (TVA) and the use of hydroelectric power, which is among the least expensive ways to generate electricity. 

The Tennessee River at a low level in the late fall.

Another consideration for companies is the cost of water, and that is a resource the southeast has in good supply, compared to other parts of the country. 

The southeast doesn’t have the lowest land prices in the US—that would be Arizona and New Mexico—but considering the plentiful supply of water and the low cost of electricity, it’s a comparative bargain. 

View of a relatively unpopulated valley, located a short drive from Chattanooga

The lower cost of electricity, water, and land mean the cost to build out new facilities is lower. Those capital investments are enormous, so if build out costs are only a small percentage lower, it could mean millions of dollars saved. 

2. A Pro-Business Political Climate

States in the southeast welcome manufacturers, and offer some big incentives. For example, in Georgia, businesses can qualify for an array of job tax credits, investment tax credits, retraining tax credits, research and development tax credits, and manufacturer’s sales and use tax exemptions. 

3. Weaker Labor Laws

Along with those incentives, the southeast hasn’t been historically pro-union, and there tend to be weaker labor laws. Most of the states in the region are right-to-work states. Cross notes that the current UAW strike will be interesting to watch, as GM has already made moves to unionize battery operations. He thinks that either the efforts to bring business to the southeast could change the politics of the region or it could change the public sentiment in the area about unionization. 

4. Access to Talent

The fourth element that Cross thinks appeals to businesses moving to the region is the access to a strong pipeline of talent. The region isn’t the most populous in the country, but there are enough people to assure a steady supply of people to work in the new facilities. Along with the existing systems of universities, technical schools, and community colleges, workforce development programs are proliferating throughout the region. 

Will More Jobs Lead to More Adoption?

One of the interesting things about the growth of EV and battery-related jobs in the southeast is that it hasn’t, so far, resulted in higher adoption rates. According the the Southern Alliance for Clean Energy report, EVs represent only 5.9% of the market share as of the second quarter of 2023. In some areas of the country, EVs are claiming closer to 10% of the market, which is historically a tipping point for mass adoption of new technology.

Increased adoption could happen due to many different reasons, including improved charging infrastructure, better tax incentives, and other factors. It’s entirely possible we won’t ever be able to pinpoint the exact reasons. However, it seems likely that people who build EVs and batteries that run them would be happy to drive them as well.