The U.S. Southeast is attracting so much manufacturing related to electric vehicles and their batteries that the environmental group Southern Alliance for Clean Energy has nicknamed the region the "Silicon Valley of EV and battery manufacturing."
But, according to a Sept. 8 analysis by the group, known as SACE, the region still lags behind national averages for EV sales, charger deployment, utility investment and public funding as lawmakers and regulators remain reluctant to pass market-driving policies and reforms.
"Transportation Electrification in the Southeast" is an annual analysis by SACE that tracks the Southeast's EV market, examining key indicators in Alabama, Georgia, Florida, North Carolina, South Carolina and Tennessee.
Through June 30, the Southeast has seen a commitment of more than 40,000 EV manufacturing and battery production jobs, as well as $32.8 billion in total production investment, according to the report. Electric vehicle sales grew by 50% over the last year and charging ports increased by about 28%. Utility investment in the EV sector increased 158% over the last year.
More than one-third of announced EV manufacturing jobs, including vehicle and batteries, are to be located in the Southeast, particularly Georgia. The report noted that successive announcements to build EVs in the state by Rivian Automotive Inc. in December 2021 and Hyundai Motor Co. in May 2022 were each projected to be the largest economic development project in the state's history. Ford Motor Co. committed to the largest investment in its history to build electric pickup trucks and batteries in Tennessee. Toyota Motor Corp. has also committed to bringing its first North American battery facility to North Carolina.
Policy limitations
Sales of EVs in the Southeast lag behind the nationwide average, according to the report. None of the six states analyzed has state-level rebates or grants for EV purchases and some have high annual registration fees, with Georgia and Alabama among the steepest in the country.
All but two states in the region — Florida and Tennessee — restrict or disallow the sale and service of EVs by manufacturers such as Tesla Inc., Rivian and Arrival, further limiting EV access. Where state auto dealer franchise laws prohibit manufacturers from selling to consumers, they also prohibit manufacturers from servicing vehicles.
Southeast states are expected to receive about $680 million from the recently passed Inflation Reduction Act, far outstripping public investments in EV infrastructure in the region to date, according to the report. That funding is expected to primarily target public fast charger deployment along the region's highways.
Utility investment
Nationwide, investor-owned utilities are investing in electric transportation programs and incentives to drive EV adoption, but other than NextEra Energy Inc.'s Florida Power & Light Co. and Duke Energy Corp. subsidiary Duke Energy Florida LLC, Southeast utilities are "significantly" behind the national average utility investment in EVs, according to the report.
Electric vehicle adoption stands to drive additional revenue for utilities, put downward pressure on rates and drive electricity demand, but utilities will have to plan to meet the challenge with further investment as adoption increases, the report's authors said.
Stan Cross, who leads the SACE clean transportation program, said both utilities and regulators in the region "would be wise to begin to increase planning and preparation activities to get ready for this rapid increase in electrification of cars, trucks and buses," and policymakers should craft regulations to support companies expanding in the region and attract others.
Utilities and regulators also are failing to adequately address equitable access to EV infrastructure across the Southeast. Through the third quarter of 2022, about $1 million in the Southeast was approved for underserved communities, less than 1% of all approved investor-owned utility investments to date, according to the report. Nationally, about 28% of utility filings were marked as equity investments.
Utility EV investment in the Southeast surged in 2021 despite a lack of policies, incentives and regulations to specifically support adoption, according to a March SACE report.
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