PRINCETON, NJ—The best U.S. cities for new electric vehicle battery supplier plants are Charleston, SC; Chattanooga, TN; and Minden, NV, according to a recent study conducted by the Boyd Co. The consulting firm evaluated 30 urban areas based on a variety of factors, such as local labor and utility costs.
The study focused on site selection for the electric vehicle supply equipment (EVSE) industry, which includes battery research, design and production, in addition to components and charging systems.
The comparative analysis shows that operating costs for a 500- worker plant range from a high of $62.4 million in San Jose, CA, to a low of $43.7 million in Chattanooga.
The analysis focused on key operating cost elements considered to be most pivotal within the corporate site selection process.
Annual operating costs were projected solely for comparative purposes, with only major geographically-variable factors being considered. Annual costs include labor, taxes, real estate, construction and utilities and are scaled to a 150,000-square-foot plant employing 500 hourly workers. Those costs not varying significantly with geography, including relocation and start-up expenses, were not considered.
“Historic levels of inflation, new corporate tax hikes and recessionary headwinds are all causing a greater focus on comparative operating cost structures in corporate relocation decisions, especially in the auto industry, where the average new electric car costs over $11,000 more than a traditional gasoline car,” says John Boyd, principal of the Boyd Co. “Many site-seeking companies in the EVSE industry are concluding that improving the bottom line on the cost side of the ledger will be far easier than on the revenue side in 2023.
“Cost differentials between an acceptable site and an optimum location can be substantial, even within a given region,” explains Boyd.
Five of the six most expensive locations are in California: San Jose, Santa Cruz, Los Angeles, San Diego and Sacramento. Boston ranked No. 4 on the list.
Detroit, the traditional home of the U.S. auto industry, ranked No. 11 on the list, between Chicago and Denver. According to Boyd, the total annual operating costs of an EV plant in the Motor City is $49,245,297.
Not surprisingly, the seven least expensive cities on the list are located in southern states such as Kentucky, North Carolina, South Carolina and Tennessee. “Many of these are right-to-work states,” explains Boyd.