Chattanooga and Tennessee are poised to benefit from an expected increase in sales of electric vehicles, as companies here manufacture the cars and the batteries that power them.
“We want to build these cars here, with the batteries built here and the batteries having the materials processed here,” said Chris Burns, CEO of Novonix, which will mark a planned $ 160 million investment in a Chattanooga plant on Monday.
Burns’ facility on Riverfront Parkway is expected to manufacture up to 10,000 tonnes of synthetic graphite per year and employ nearly 300 workers. This product is used in ultra-long-lasting, high-performance anode material for lithium-ion batteries for electric vehicles and power grid storage.
U.S. Energy Secretary Jennifer Granholm is scheduled to appear in Chattanooga, representing President Joe Biden’s administration and his support for electric vehicles.
The $ 1.2 trillion federal infrastructure bill enacted by Biden on Monday provides $ 7.5 billion for electric vehicle charging stations nationwide and offers generous tax credits to buyers of battery-powered vehicles.
“We are extremely pleased that Secretary Granholm is taking the time to come to the event,” Burns said in a telephone interview. “It shows the importance of what we’re doing. We really want to bring large-scale production to the supply chain in North America.”
Burns said America has long relied almost entirely on China for key materials such as what Novonix produces in Chattanooga.
“Until recently, almost all battery cells were built in China,” said the CEO of the Nova Scotia-based company.
While the production of battery cells has seen phenomenal growth in North America recently, there is a need to bring material suppliers to this region, Burns said.
“This site that we are opening and expanding is one of the first large-scale sites to produce some of these materials at scale in North America,” he said of the former Alstom plant. of 400,000 square feet that Novonix is in the process of modernizing.
Burns also cited Volkswagen’s assembly of the battery-powered ID.4 SUV, due to start in Chattanooga next year, as well as production of electric vehicles by other automakers such as Ford, General Motors and Nissan in the Tennessee. Additionally, battery makers like SK Innovation and LG are investing in Tennessee, Georgia, and Kentucky to serve automakers.
Johan de Nysschen, chief operating officer for the Volkswagen Group’s North American region, told Chattanooga this fall that sales of the ID.4, which is now assembled in Germany, are “a good start.”
“We are desperately short of supply,” said the region’s COO of the ID.4 which went on sale in the United States around March. “We look forward to production going into production in Chattanooga. The market is ready for accelerated adoption of electric vehicles.”
VW Chattanooga plans to add around 1,000 more employees over the next year to the 4,000 already working at the plant to hire a third crew and build the ID.4 with the Atlas SUVs it is currently building.
The ID.4 is “only our opening salvo” in the EV space in America, said de Nysschen.
“The ID.4 is the first of many electric vehicle entries for the brand and the VW Group,” he said, noting that the German automaker is committing $ 41 billion worldwide to battery-powered vehicles.
In terms of hiring, Burns said Novonix expects “a small wave next year” and then gradually ramp up its workforce as production ramps up.
Currently, the company has approximately 50 people in Chattanooga. In 2017, Novonix opened a small store in Lookout Valley.
Burns cited previous statements from the company to consider opening another facility with 1,000 employees.
“We are in the process of evaluating,” he said. “Tennessee continues to sound like an incredibly attractive place to grow, but we are looking at several different jurisdictions.”
Chattanooga and the County of Hamilton have already approved property tax relief for Novonix of up to 50% over 10 years, although the company would pay all county school taxes. Meanwhile, the state of Tennessee has agreed to provide an accelerated grant of $ 3 million for the Novonix project.
Earlier this year, the US Department of Energy awarded Novonix $ 7.1 million for technology development.
“We are so far behind China in so many ways, it is paramount that the government recognizes that it has to play a role,” Burns said.
Also this year, energy giant Phillips 66 agreed to acquire a 16% stake in Novonix for $ 150 million.
Charles Wood, vice president of economic development for the Chattanooga Area Chamber of Commerce, said Novonix was “a great addition”.
“This is about manufacturing in an industry that has a long growth curve ahead of it,” he said.
Chattanooga businessman Jimmy White and local hotel developer Hiren Desai bought the former 121-acre Alstom property where Novonix is operating for $ 30 million in 2018.
White said his Urban Story Ventures group is expecting a company like Novonix. White said the mixed-use redevelopment of Alstom’s entire property could bring $ 2-3 billion in investment, add more than $ 11 million in tax revenue per year for Chattanooga and the Hamilton County and create more than 5,000 jobs.
The use of former Alstom property for manufacturing dates back over a century as a manufacturing site for pressure vessels, tanks, fire tubes and water tube boilers. In 2007, Alstom announced plans for a new $ 300 million Chattanooga plant and built the turbine manufacturing plant.
But in 2015, GE bought out Alstom’s electrical business in France and later announced it was shutting down the turbine manufacturing plant and two adjacent facilities, cutting nearly 235 jobs in Chattanooga.
Under Alstom, the installation was known as “Big Blue” due to its distinctive coloring. The new developer renames the resort as The Bend, named after its location on a bend in the Tennessee River.
Contact Mike Pare at [email protected] or 423-757-6318. Follow him on Twitter @MikePareTFP.