The latest victor in the heated competition to land electric-vehicle investments is South Carolina, which has won a sizeable new project thanks to the growing attractiveness of the US as an EV market and investment destination.
Scout Motors, an independent automotive company backed by the Volkswagen Group and headquartered in Virginia, announced plans last week to open a $2 billion electric truck and SUV manufacturing plant outside of Columbia. The more than 1600-acre facility will have a capacity of 200,000 vehicles per year and will create at least 4,000 jobs, according to Governor Henry McMaster’s office. Production is expected to begin by the end of 2026.
Another prize is still up for the taking. VW said it is also looking for a site for what will be its first battery factory in North America. The company said North America has become more attractive as a market due to the more than $400bn in clean energy incentives being rolled out by the Biden administration. VW’s finance chief Arno Antlitz said the US offers “huge potential” for the company and the incentives bring “the possibility to enlarge our global footprint even faster” in the country.
Other major international automakers including Hyundai, Honda and Toyota have also announced plans to produce EVs or batteries since the US Inflation Reduction Act brought in the subsidies, which require that the vehicles be made mostly in the US and exclude materials from certain countries such as China.
Scout is also expected to receive county-level incentives which have already received preliminary approval, according to local media reports, and the governor said he is requesting approval for nearly $1.3 billion in state incentives.
South Carolina has seen significant success in the past decades in attracting automotive investments: it plays host to more than 500 automotive-related companies and 75,000 automotive industry employees and is ranked number one in the US for export sales of both completed passenger vehicles and tires. But it now has its sights set on becoming a leader in EV production and innovation.
The governor issued an executive order in October 2022 which prioritized building EV infrastructure, training workers for advanced manufacturing jobs and tasking a centralized state working group with EV strategy planning.
Such ‘gigafactories’ are highly sought after investment projects due to the large job numbers, big dollar-values attached to them and green credentials they connote. The good news for economic developers keen to attract them is more and more are coming down the pan. Business intelligence firm GlobalData estimates that between $106bn and $177bn is set to be invested in gigafactories worldwide until 2030.
In 2020 there were only 66 EV plants; by 2030 there is forecast to be 155. The gigafactories of the future are expected to be larger and more geographically dispersed.
China is currently the world leader in gigafactories by a large margin, accounting for 65% of global gigafactory capacity in 2020 compared with 11% for North America and only 9% for Europe. GlobalData predicts that by 2030 China’s share will reduce to 50%, with Japan and South Korea also reducing theirs, but the biggest beneficiary will be Europe whose share the company expects to grow to 32% versus 14% for the US.
The US, however, is determined to compete more aggressively in the great global gigafactory competition and is willing to throw major subsidies at the problem if need be.