According to Vantage Market Research, the global electric vehicle (EV) market was worth $165 billion in 2021 and is expected to grow to $434 billion by 2028, a compound annual growth rate of 17.5 percent. In the U.S., despite slowdowns from COVID-19 and related supply chain disruptions, EV gains are similar. Revenue in the U.S. EV market is expected to grow from $50 billion in 2022 to $139 billion by 2027, a growth rate of almost 23 percent.
In part thanks to federal initiatives by the Biden administration, the pace of EV investment is accelerating — in 2022 alone, companies announced a total of $13 billion in domestic EV manufacturing, more than triple the investment in 2020. Companies also plan to spend billions of dollars in battery R&D and EV charging.
{{RELATEDLINKS}} Tennessee at the Forefront
Tennessee has long been a leader in EV manufacturing in the U.S., starting nearly a decade ago with Nissan, which began building electric vehicles in 2013. Other automakers followed, including Volkswagen in Chattanooga and General Motors in Spring Hill. In fact, more than 900 automotive suppliers operate across the state in support of the automotive manufacturing sector.
Since 2017, companies have committed to create more than 12,300 new jobs and invest $16 billion in Tennessee through EV-related projects. Automotive companies are attracted by the state’s highly-skilled and automotive-experienced workforce, modern transportation infrastructure, low business costs, central location, and reasonable cost of living.
“Tennessee is well-suited for EV manufacturing due to its diverse workforce, location for efficient logistics routes, and future talent pipeline from colleges and universities across the state,” said David Johnson, senior vice president of manufacturing and supply chain management at Nissan North America, which is headquartered in Franklin.
Multi-Billion-Dollar EV Investments
Automakers are moving to the Southeast because of the region’s many manufacturing benefits. Both EV start-ups and legacy automakers, as well as their suppliers, are investing heavily in the state. With more than 180,000 electric vehicles produced in the state since 2013, Tennessee ranks first in the Southeast for EV production.
Tennessee has long been a leader in EV manufacturing in the U.S., starting nearly a decade ago with Nissan, which began building electric vehicles in 2013. In the last half of 2021, Tennessee held the largest share of EV-announced investment of any state in the country. In September 2021, Ford announced it would partner with SK Innovation to bring 6,000 EV manufacturing jobs to its new $5.6 billion BlueOval City. Construction has started on this mega-manufacturing campus near Stanton, about 40 miles northeast of Memphis. Operational in 2025, the plant will manufacture the next generation of electric F-series trucks. It will be the largest, most advanced, and most efficient automotive production campus Ford has ever built. Ford also announced an agreement with Redwood Materials, a battery materials company, to ensure valuable battery materials are recycled and reused to reduce costs and reduce reliance on imports.
Another multi-billion-dollar project announced in 2021 is Ultium Cells, a joint venture between LG Energy Solution and General Motors. The partnership’s construction of a $2.3 billion battery cell manufacturing plant in Spring Hill is well under way. The 2.8-million-square-foot facility is scheduled to open later this year; once operational, the plant will supply battery cells to GM’s Spring Hill assembly plant and create 1,300 new jobs in Maury County.
EV announcements have continued steadily through 2022, including the following:
- Piedmont Lithium plans to build a lithium processing plant to supply the rapidly growing EV market. The decision was in response to U.S. government support for expanding the domestic production of lithium, a critical metal for EV batteries. When it begins production in 2025, the plant will be one of the largest lithium hydroxide processing sites in the U.S. In September 2021, Ford announced it would partner with SK Innovation to bring 6,000 EV manufacturing jobs to its new $5.6 billion BlueOval City.
- Ultium Cells will invest an additional $275 million to expand its upcoming production facility that is already under construction in Spring Hill. This extra capacity will be used to make battery cells for the Cadillac LYRIQ and other electric vehicles. The plant, which will be operational in late 2023, will boost the company’s battery cell output by 40 percent.
- Tritium, a global leader in the electric vehicle charging industry, will establish its U.S. manufacturing base in Lebanon where it will build fast DC chargers for EVs. The 120,000-square-foot facility will produce more than 10,000 fast-charging units per year using six production lines, with the capacity to expand production if needed.
- LG Chem plans to construct a $3.2 billion cathode manufacturing facility in Clarksville. The new plant will support the EV battery market and create about 860 new jobs in the county. The facility will be the largest of its kind in the U.S. and is also the single-largest announced foreign direct investment in Tennessee’s history.
- Daejin Advanced Materials USA will invest $10.2 million to establish a manufacturing and processing facility in Cumberland City to produce trays for EV batteries and also increase its capabilities for plastic injection, plastic extrusion, vacuum forming, and assembly. About 100 jobs will be created over five years.
- Duksan Electera America will locate its first North American manufacturing facility in Shelbyville, creating about 100 new jobs. The $95 million plant will produce electrolytes for the EV battery industry.
Tennessee continues to support its thriving EV manufacturing industry and EV supply chains. In recent news, in July 2022 Volkswagen of America started up its U.S. production of EVs at its plant in Chattanooga, where it makes the all-electric ID.4 compact SUV. Volkswagen invested $800 million in the electrification of its Chattanooga factory, which includes dedicated facilities for vehicle and battery pack assembly.
Tennessee is also becoming a leader in the domestic production of critical materials used to make lithium-ion batteries, such as lithium, cobalt, nickel, and graphite. Tennessee automakers are also at the forefront of solving key EV challenges such as cost-effective energy-storage solutions, battery durability, and regulatory hurdles (for example, driving range and fast charging). Tennessee is also becoming a leader in the domestic production of critical materials used to make lithium-ion batteries, such as lithium, cobalt, nickel, and graphite.
“Tennessee is well-positioned to provide automotive manufacturers and suppliers with the ideal geographical location to support their growth,” said Tennessee Department of Economic and Community Development Commissioner Stuart McWhorter. The steady stream of impressive EV investments “is also strong vote of confidence to our state’s skilled workforce and business friendly climate,” he added.
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