Introducing North Carolina's Electric Vehicle Industry
One of the most recent topics in North Carolina economic development has our minds racing – literally. Since December 2021, North Carolina has announced two major projects in the electric vehicle industry: Toyota, the well-known Japanese automotive company, will construct a battery manufacturing facility at the Greensboro-Randolph megasite; and VinFast, a Vietnamese electric vehicle company, will bring their first US manufacturing plant to Moncure in Chatham County.
This blog will provide some background on the two manufacturing facilities and their proposed business in North Carolina. Then, it examines the importance of their economic impact in the state, as well as the significance to Burlington and the surrounding areas in the near future.
Toyota Battery Manufacturing
Toyota announced an automotive battery plant on an 1,800-acre megasite in the Greensboro-Randolph area in December of 2021. The $1.29 billion project is expected to be online by 2025, creating 1,750 jobs. The battery plant will initially have four production lines in operation to produce 200,000 batteries per year, with the capability to expand to six production lines.
This project has significant potential to grow North Carolina’s economy – within 20 years, economic growth from the plant is expected to increase by $9.5 billion in the state. Because of this, the project has received around $439 million in state and local incentives for its development. The Toyota battery plant location is just 30 miles southwest of Burlington, with easy access to the highway, railroad, airport, and seaports. Also close by – both within Randolph and its surrounding counties – are quality schools to train employees in the related manufacturing industries.
Moreover, there is strong speculation that Toyota will soon announce an even larger expansion at the new battery plant. The 2022-23 North Carolina Budget, passed by state lawmakers and signed into law in mid-July, contained an appropriation of $225 million to “the megasite industrial park in Randolph County.” Though no company was specifically named, the state budget agreement would trigger if this mystery company added an additional 2,125 jobs with capital investment between $1.7 and $2.1 billion. Most of the appropriation would be for site work, roadwork, and wetlands mitigation, with some available for job creation.
VinFast Automotive Manufacturing
In March 2022, North Carolina met a long-standing economic development goal: to welcome its first automobile manufacturing facility within the state, VinFast. The company chose Moncure in Chatham County to construct a new automobile manufacturing facility, which will bring 7,500 jobs to the area over the course of five years. The 2,100-acre Triangle Innovation Point megasite will host the VinFast project and supplier industries, with the goal to begin operation in July of 2024. The company expects initial vehicle output capacity to be around 150,000 annually. The manufacturing will focus on two models of VinFast SUVs in addition to producing batteries for electric vehicles and electric buses.
The arrival of VinFast marks the largest North Carolina economic development project in history. By 2026, the company plans to invest $4 billion in both the company and the county. Within 30 years, the facility is expected to grow the North Carolina economy by $71.6 billion. The North Carolina Department of Commerce has approved $854 million in state incentives for the project, which also received $400 million in local incentives.
The Benefits and Risks of EV Projects
The EV industry has many pros to the North Carolina economy, not to mention to clean energy as a whole. Electric vehicles help to improve fuel economy, lower fuel costs, and reduce emissions. By using a battery electric vehicle (BEV) or plug-in hybrid electric vehicle (PHEV), the energy use does not rely on petroleum consumption, but rather electricity. By changing the energy usage to electricity, the sources of power can extend to outputs such as solar energy, coal, nuclear energy, wind energy, and hydropower.
From an economic standpoint, the introduction of the EV industry stands to increase the quality of work to the area it chooses. The manufacturing work will bring in higher paying and higher skilled jobs to the area; by bringing in higher paying jobs, the average amount of spending within the community increases, which can manifest in supporting local businesses, supplying additional funding for community events, etc. Though the EV projects are locating in Chatham County and Randolph County, respectively, the surrounding communities – such as Burlington – are likely to experience economic benefit by related manufacturing industries needing to move close to the automotive plants. This will introduce indirect job creation to these surrounding areas, producing a much wider economic impact than just the EV projects themselves.
These types of projects can be risky as well. VinFast does not have an established presence in the United States, and North Carolina has never had an automobile facility; both the state and the company have something to prove and are hoping to demonstrate success. Electric vehicles are relatively new within the automotive industry, so the newness of the technology presents risks as well. There is even some concern with existing supply chain issues that were exacerbated by the COVID-19 pandemic and other contributors, which could lead to stutters both in the workforce needed and the supply chain at hand. The introduction of such a novel industry is high risk – but, as in most areas of business, high risk can lead to high reward. That is the perspective North Carolina is taking with VinFast and Toyota; having seen the success of automotive manufacturing in other states, as well as the increasing need for alternative forms of energy consumption, the excitement around the projects cannot be exaggerated.
What does this mean for Burlington?
While the location of these two manufacturing facilities is just south of Burlington, there is great potential for each project to have huge economic impacts to our community. Alamance County shares county lines with Chatham County, where VinFast will relocate; furthermore, we share a border with Randolph County, the location of the Toyota plant. Projects on the scale of VinFast and Toyota, with new job creation estimates nearing 10,000, will most certainly have significant regional impacts in future supplier site development and the regional workforce. There is a significant opportunity for the relocation of not only of people who will work for VinFast and Toyota, but also the relocation of suppliers, which can create numerous jobs within Burlington.
Many comparisons are drawn to the BMW facility in South Carolina. BMW pledged to employ 2,000 people within 8 years of its announcement in 1992; now, 30 years later, the company employs more than 11,000 people and has invested $12 billion in the facility. From this, many manufacturing operations of suppliers flocked to South Carolina after the establishment of BMW. For every one BMW employee, around 2.5 to 3.5 indirect jobs were created by suppliers. Furthermore, there was a noticeable increase of international companies to South Carolina as well. Before the facility was built, there were 34 international companies present in the state; 20 years later, there are more than 130 international companies present. Should VinFast and Toyota grow successfully in the next few years, North Carolina could see some stark changes in its industrial scenes at the heart of the state.
An essential aspect of manufacturing work is the presence of accessible education and training. Alamance Community College, for example, offers programs in fields such as mechatronics, industrial systems, welding, and more. Elon University will be a promising asset as well, especially given its construction of the Innovation Quad to house the Engineering and Physics programs. Once VinFast and Toyota begin the hiring process, they will look for people in programs such as these.
Burlington is also a growing, attractive area for workers to reside in with an easy commute to work at those locations. Indeed, Burlington are primed for these new economic development projects – our community offers quality education, available areas for manufacturing, and a thriving community to encourage workers to want to live in. Though North Carolina has not had a strong presence in the automotive industry until recently, we are eager to start onto a road of success.
Isabella DeLaGarza, EYOS Fellow
425 S. Lexington Ave.
Burlington, NC 27215