Is America's Southeast The New 'Motown?' How Small Towns In Georgia, Tennessee Are Taking On Detroit's Auto Legacy

The Southeast region of America is rapidly transforming into a hub for electric vehicle and battery production, posing a challenge to Detroit, traditionally the heartland of the auto industry that is home to the Big Three — Ford Motor Co F, General Motors GM and Stellantis NV STLA.

What Happened: The Southeast region is becoming increasingly attractive to foreign auto and battery manufacturers aiming to penetrate the burgeoning American EV market, as reported by the Financial Times.

This trend has been catalyzed by the substantial tax credits and environmental subsidies made available through the Inflation Reduction Act enacted by the Biden administration.

Since 2010, the region has seen investments exceeding $70 billion in EV and battery production, outstripping the Midwest’s $51 billion, as per the report. Michigan is still the investment leader with almost $24 billion, but Georgia and Tennessee are not far behind.

The Southeast’s rise as a key player in the auto industry has been in the making for quite some time, with European and Japanese manufacturers at the forefront of this shift. Examples include BMW‘s BMWYY plant in Spartanburg, South Carolina, Mercedes-Benz‘s MBGAF largest North American plant in Tuscaloosa, Alabama, and Toyota Motor‘s TM plant in Georgetown, Kentucky.

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In recent years, the shift towards the Southeast has intensified, with both large and smaller automakers contributing to a boom in battery and EV production across the Deep South.

The region’s “right-to-work” laws, which specify that workers are not obligated to pay union dues even if they are represented by one, have also attracted investment. The EV Jobs Hub reports that 85% of EV and battery investments have been directed towards these ‘right-to-work’ states.

However, some experts suggest that the figures may be misleading as new plants in the southeast require more investment due to their greenfield status. Conversely, automakers in the Midwest can upgrade existing infrastructure at a lower cost.

Why It Matters: As the EV market continues to expand, an increasing number of startups are investing heavily to secure a foothold in this sector. 

This investment trend is being propelled by growing consumer interest, governmental support, and technological advancements that are making EVs more appealing. 

Such growth in the EV sector, coupled with the Southeast’s favorable policies and investment environment, could further solidify the region’s emerging status as the new ‘Motown’ of the EV era.

Read Next: UAW President: Tentative Agreement with Ford Reached — ‘GM And Stellantis Up Next’

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