Manufacturing Dive: SC an emerging ‘hot spot’ for EVsApril 26, 2023
Industrial publication features South Carolina’s booming EV activity
As electric vehicle (EV) companies continue to converge on South Carolina, it is leading many to question — what is it about this state that is so irresistible to automotive and electric vehicle industries?
Manufacturing Dive explores this question in its April 14 article, “Why EV companies are flocking to South Carolina.”
With its booming manufacturing environment, easy port access, favorable tax incentives and deep labor pools, South Carolina has proved itself a hot spot for electric vehicle companies and suppliers to grow and thrive. Manufacturing Dive features several manufacturing attractions:
An automotive environment
With more than six vehicle OEMs and 500 automotive-related companies, South Carolina leads the nation as the No. 1 exporter of completed passenger vehicles. The state has seen a mix of existing employers electrifying their products, like BMW’s $1.7 billion expansion to prepare for electric vehicle production at Plant Spartanburg, and new companies establishing locations, like Scout Motors’ $2 billion all-electric rugged vehicle production facility.
As these companies grow in South Carolina, it sparks a reinforcing cycle that attracts even more manufacturers and suppliers to the state.
“’We have a well-established supply chain and a diverse array of suppliers who are ready for the production of electric vehicle components,’ said John Lummus, President & CEO of Upstate SC Alliance.
‘Automotive companies, including EV operations, are predisposed to seeking out existing automotive/EV clusters to take advantage of access to supply chains, workforce skillsets, and educational/research resources,’ said Tracey Hyatt Bosman, managing director at Biggins Lacy Shapiro & Co. Bosman previously worked with the state’s Department of Commerce to attract automotive investment to the area.
‘Choosing a location that has already proven successful for other similar operations minimizes risk,’ Bosman added.”
Location and infrastructure
Companies in South Carolina have access to the most efficient port on the East Coast, as well as interstate and rail connecting to more than 100 million consumers in a day’s drive. Within the Upstate, the Inland Port Greer extends the Port of Charleston’s reach 212 miles inland with daily, overnight rail service, and Greenville-Spartanburg International Airport is offering an increasing number of cargo connections in partnership with Maersk.
Competitive utility rates are another factor. As of December 2022, SC had a price of $8.33 per kilowatt hour for industrial electricity, the 3rd lowest in the South Atlantic Region, compared with the US average price of $8.63.
“Producing batteries and electric components is power-intensive, and available, affordable utilities are a huge driver for these types of projects,” Lummus said.
Within Upstate SC, the automotive cluster employs 24,509, which is 466% above the national average and a sign of the Upstate’s deep automotive manufacturing presence.
Upstate companies receive workforce development support from key educational partners, including Clemson University, which launched its automotive engineering graduate program in 2006 and was the first university in the country to graduate a Ph.D. student in automotive engineering.
“While the U.S. continues to struggle with a labor crunch in the manufacturing industry, South Carolina offers a deep talent pool with knowledge in emerging technology, said David Clayton, executive director of the Clemson University International Center for Automotive Research.”
The Upstate’s four technical colleges — Greenville Technical College, Piedmont Technical College, Spartanburg Community College and Tri-County Technical College — are another workforce development asset. They train learners at all levels of automotive and engineering technology, and South Carolina’s readySC program provides companies custom technical training.
Tax and financial benefits
South Carolina offers major statutory tax incentives that attract companies to the state, including no state property tax, no inventory tax, no sales tax on manufacturing machinery, no wholesale tax and no local income tax.
“In addition to traditional incentives, Governor Henry McMaster signed an executive order last October to create the SC EV Economic Development Initiative.
The order gives state policymakers more authority to expand the state’s EV manufacturing market through favorable legislation and tax policies, said Sam Moses, partner at Parker Poe, which advises auto manufacturing and technology companies on site selection.”