When one thinks of American technology and innovation, Silicon Valley is usually the first place that comes to mind. But in recent years, another region of the United States is going all-in on EVs, challenging the West Coast’s sector dominance. That’s the Carolinas.
Toyota North Carolina Battery Plant Construction
And that’s just one Carolina. South Carolina is seeing upgrades and expansions to plants owned by BMW and Volvo to make future EVs and batteries and, perhaps most notably, Scout Motors’ all-new $2 billion factory to make electric and extended-range trucks and SUVs.
The Southeast’s EV game is proliferating big time, to put it mildly. And much of that is thanks to the investments and tax incentives pushed by the Inflation Reduction Act (IRA), the Biden Administration’s signature infrastructure and climate legislation.
Scout Motors Factory Groundbreaking 2024 Official Photos
But there’s something else notable about the region. North Carolina voted for President Donald Trump in the 2020 election. And it’s likely that Trump could win the swing state again in 2024. South Carolina, Trump almost certainly has in the bag. And begs a question: if the region’s EV efforts flourished under a pro-EV federal administration, what would happen if different leadership was in the White House?
We don’t really know yet. Vice President Kamala Harris, the Democratic nominee, is expected to continue or even expand those policies; Trump is not, to put it lightly.
But the two states are part of a nationwide boom that few people would want to see disappear if, for example, Trump makes good on his threats to end Biden’s EV and climate subsidies. “We need to future-proof our economy and make sure we’re getting modern innovative companies here,” says Christopher Chung, the CEO of North Carolina’s Economic Development Program.
The Lay Of The Land: Why EV Manufacturers Are Going East
North Carolina’s popularity with electric vehicle ventures stems from several avenues. These include lower labor costs, cheaper taxes, proximity to coastal ports and existing car manufacturing ecosystems and a diversified workforce, thanks to local universities and technical colleges.
“We’re a manufacturing state, historically,” Chung told InsideEVs. “If you’re looking at doing EV assembly or battery manufacturing, knowing and working with a state that has a strong manufacturing history is really important.
But these factors alone aren’t enough to woo manufacturers considering the state. The rest resides within the locality’s ability to incentivize companies to set up shop. “Incentive packages are usually split at both a state and local level because typically a company is not just choosing a state to do business in, but they’re choosing a specific county and sometimes a specific city within that county,” Chung said.
Photo by: Toyota
A possible Toyota electric SUV would be powered by batteries from its new North Carolina plant.
Chung said these incentive packages are usually complex as they have to weigh out numerous factors. “So our job is to try to understand, of course, what’s the employment, investment, and the wages that a company is pledging to put here in the state,” he said. Another factor is what the company has to benefit the state.
Fact sheet about Toyota’s NC battery plant.
Take Toyota’s battery plant, for example. Given the automaker’s huge push to turn most, if not all, of its lineup into hybrids, that plant will be busy for a long time. And while Toyota has been slower than most to embrace fully electric cars, Toyota Battery Manufacturing North Carolina will be set up to support at least two EVs someday. In other words, these are long-term investments, poised to grow over decades—hardly some run-of-the-mill food processing plant.
It’s why, as NC Newsline reported recently, the state is due to receive $3.5 billion in funding from the IRA and Bipartisan Infrastructure Law for a litany of manufacturing projects including EVs.
Bi-Partisanship For Securing Investments
Despite all the EV interest, North Carolina is very much a purple state. Its liberal, blue metropolises are surrounded by conservative, rural localities. The amalgamation of regions has given the state an interesting voting history. In 2020, North Carolina voted for Republican Trump in the presidential election, Democrat Roy Cooper on the gubernatorial side, and a majority Republican rule in the state house and senate.
Toyota Battery Manufacturing, North Carolina (under construction)
To improve and strengthen the state’s workforce, EV manufacturing simply happens to be a great avenue to do so. It’s advanced technology, and nobody can say “no” to getting these companies to relocate to North Carolina. Plus, some of these investments were implemented in deep red counties. Toyota’s battery manufacturing facility is in Randolph County, a locale with a 211% Republican voter advantage (as opposed to Democrats.)
Positioning EVs as a way to accelerate the workforce, generate revenue, and “future-proof” the economy is one of the most effective ways to dismantle the political barrier.
“The politics of EVs are all tangled up because our country is so partisan,” Murphy said. “You’ve got to move the debate from the environmental stuff to jobs and competition with China.”
A More Complex Situation In South Carolina
Photo: Volvo
Photo by: Scout Motors
Scout Traveler and Terra Concepts
But there’s little doubt how South Carolina will vote next week. That state is heavily expected to tilt toward Trump, who has consistently promised to “terminate” what he falsely calls “Kamala’s insane EV mandate” while vowing to “rescind all unspent funds under the misnamed Inflation Reduction Act.”
So if he does, what happens to the money driving those investments now—not to mention future EV tax incentives that encourage people to buy those cars? They may well be on the chopping block, and it’s why the Biden White House is now scrambling to allocate as many of those funds as it can in case the election doesn’t go Harris’ way.
Legal experts and industry observers generally believe it’d take an act of Congress to repeal everything Trump says he wants to get rid of. But many of them also believe doing so would mean big setbacks for America in the EV race.
Push Or Pull
When it comes to governmental forces, there are industrial and regulatory policies, says Levi Tillemann, the author of The Great Race: The Global Quest For The Car Of The Future. Industrial policies “push” money and resources to a specific industry to help it grow. An example of this would be giving a tax break to an electric vehicle manufacturer for building a plant in the country. The other is regulatory policies. Regulatory policies “pull” industries up to certain standards through legal requirements. An example of this is the Clean Air Act, mandating catalytic converters.
“The state that’s led all of these efforts has been California, and the reason for that is that California had special authorities granted to it under the Clean Air Act Amendments of 1970,” Tillemann told InsideEVs. “And so [California] created this, I would say, fairly straightforward, but also extremely innovative, synthetic market for zero-emission vehicle credits, where they had the mandate, and then they allowed people to buy and sell credits amongst themselves.”
BMW Group Plant Spartanburg
“So if you cut back on your industrial policy, or if you cut back on your regulatory policy, either one of those is going to have a pretty significant effect on the growth in EV manufacturing and the U.S. EV market,” Tillemann told InsideEVs. “But if you hit both of them at the same time, then you could see a really significant slowdown.”
Impacts A Trump Victory Could Have On EVs
Musk at Trump’s recent Madison Square Garden rally. Screenshot: YouTube
Can EV advocates count on Trump and Musk’s newfound bromance to change the calculus? That depends on who you ask.
“I do think that the alliance between Elon Musk and Donald Trump could have some sort of strange upside for the environmental and electric vehicle communities,” Tillemann said. “I didn’t think that it was going to have much of an impact, but Elon Musk has gone from being sort of a Trump-curious tech executive to Donald Trump’s biggest fanboy, and Donald Trump is very easily swayed by people who flatter him and people who support him in various ways, whether rhetorically or financially.”
Murphy, the political consultant, said he saw things differently. “Elon’s interests are not necessarily aligned with the EV industry. They’re aligned with Tesla,” he said. “I would say a Trump presidency is likely to add a lot of friction to government-supported EVs, slowing things down, maybe going after the tax credits or the lease loophole that help dealers offset the price.”
What Could Be Next For The EV Industry
BMW’s Neue Klasse EVs. Its South Carolina plant is expected to make six EVs by the end of the decade.
So will a Trump Administration curtail EV growth and support, if it comes to pass? Surely his role would have some impact, but it’s too soon to say what precisely will happen. But here’s what we do know. Electric vehicle sales are steadily growing, states love electric vehicle jobs, and China is unrelenting with its technological progress.
As Ford, General Motors and others still grapple with making EVs and batteries profitably, it’s clear that there are growing pains on the path to electrification. Any assistance from Uncle Sam—not unlike the stiff tariffs keeping BYD and the like out of our market for now—would be greatly appreciated. And interestingly, both parties have supported protectionist measures against Chinese EVs in the form of tariffs.
“Laws are kind of like a coloring book,” Tillemann told InsideEVs. “You have all of these outlines, but then the Administration is responsible for filling in the colors. And depending on what colors you use, that picture is going to look very, very different at the end of the day.”
Andrew Lambrecht is an industrial engineering student, TEDx speaker, and freelance writer based in the Carolinas. He has previously written at Forbes Wheels and currently co-hosts The Current Review EV and technology podcast. Andrew is a former intern at Lucid Motors, where he worked on the charging validation team.
Credit : insideevs.com