Volvo battery plant signals EV surge in Southeast
Volvo announced this week it will build a battery assembly plant at its factory in South Carolina, the latest sign of growing electric-vehicle production in the southeastern United States.
Batteries produced at the factory will go into the all-electric Volvo XC90 SUV. Currently, this seven-seater is built with a gas engine, but an all-electric version is due in 2022.
The move is the latest signal that the Southeast, America’s lesser-known auto hub, might become a center for EV manufacturing. Last week, a company called SK Innovation said it would double the size of a large battery plant now under construction in Georgia.
The trend started a year ago when Volkswagen said it would build an $800 million EV factory next to its existing operations in Chattanooga, Tenn.
Strangely, the battery activity in the South is a sign that Asia is optimistic about Americans’ appetite for electric vehicles.
Volvo has been owned by Geely, a major Chinese automaker, since 2010. And the Georgia battery plant is being built by SK Innovation, a South Korean conglomerate.
The South’s auto industry is mostly made up of foreign automakers that build in the United States at lower prices. Unlike in Detroit, Southern auto workers are for the most part not unionized and command lower wages.
Volvo’s South Carolina factory opened in 2018. Located in Ridgeville, a 40-minute drive northwest of Charleston, it is a worldwide producer of the S60 sedan.
The battery plant is part of a larger $600 million expansion at the factory that includes a second production line and a training center. The battery shop will take battery modules and assemble them into packs for use in the future electric XC90.
The facility is expected to break ground in the fall and be completed by the end of 2021, according to a company spokeswoman.
SK Innovation’s presence is in Commerce, Ga., 70 miles outside Atlanta. The skeleton of its first plant is still under construction at a cost of $1.7 billion (Electric Road Trip, Sept. 19). Last week, the company’s CEO, Kim Jun, told Reuters that a second plant is on the way at the same site to meet flourishing demand.
Together, the two factories might produce nearly 20 gigawatt-hours of batteries a year. By comparison, Tesla Inc.’s more well-known Gigafactory in Nevada is, at full build-out, projected to produce 35 GWh of battery cells.
The Georgia facility, Jun said, is being built in the United States to avoid tariffs and meet American demand for EVs. The main customer for the first phase of the plant is Volkswagen’s factory in Tennessee.