Situated at the forefront of innovation, the Midwest emerges as a strategic hub for the electric vehicle (EV) industry. Boasting a rich automotive manufacturing legacy and proximity to the largest fresh surface water system on earth (Great Lakes), the region provides an ideal environment for companies venturing into electrification manufacturing. The LG EV facility offers an interesting model for where EV battery facilities may want to locate and offers insights into where the EV supply chain should be located connected to these battery plants.
Honda since the 1980s has been a Foreign Direct Investment (FDI) victory for the United States with major manufacturing facilities first launched in Central Ohio. Honda’s most recent investment in Ohio, totaling $4.4 billion, represents a monumental shift towards electric vehicles (EVs) and battery production. This ambitious project involves retooling existing production capacity in three plants, marking what Honda describes as a “once-in-a-hundred-years-change.” The initiative aims to generate over 2,500 new jobs, with a $700 million investment allocated to retooling auto and powertrain plants, resulting in the creation of 300 jobs. Additionally, a $3.5 billion joint venture with LG Energy Solutions is underway to build a facility for battery module production, estimated to generate 2,200 jobs. Situated in Fayette County, approximately an hour southeast of Dayton, the battery plant is a pivotal component of Honda’s strategic shift towards electric mobility. Construction is scheduled to commence in early 2023, with production expected to kick off by the end of 2024. This project aligns seamlessly with Honda’s commitment to achieving “carbon neutrality” by 2050. Beyond its environmental impact, the investment significantly contributes to Ohio’s economic landscape, positioning the region as a thriving hub for advanced manufacturing and sustainable innovation.
Site analysis is a critical aspect of the corporate site location decision by EV battery companies. As the production of electric vehicle (EV) batteries intensifies, the evaluation of site characteristics becomes pivotal for these projects.
- Size Preferences and Adjustments: Companies exhibit diverse preferences in site sizes, ranging from under 100 acres to over 500 acres, aligning with their unique project scopes. The ceiling height, a crucial factor for manufacturing operations, is adjusted based on project size. It ranges from 25′-30′ for smaller endeavors to an impressive 60′, with towers reaching 200′ for more extensive projects.
- Ownership Trend and Environmental Prioritization: A noteworthy trend emerges as companies in the EV industry express a preference for ownership, choosing to buy land outright rather than engaging in leasing arrangements. This trend is indicative of the industry’s inclination towards long-term investments. Moreover, the significance of site characteristics, including rectangular or square layouts with flat topography, cannot be overstated.
- Environmental Considerations and Sustainable Practices: In the EV battery sector, environmental considerations hold paramount importance. Comprehensive wetlands assessments and rigorous geotechnical analyses take precedence in the site selection process. This reflects a strong commitment to sustainable and responsible project development, aligning with the industry’s broader environmental goals.
When navigating the ideal locations for EV battery production, stringent considerations come into play to ensure optimal functionality and community integration. First and foremost, residential separation emerges as a key criterion, emphasizing the need for sites to maintain a safe distance from residential developments. This strategic measure aims to mitigate potential environmental impacts and uphold the well-being of local communities. At the same time, attention is directed towards transportation infrastructure. Ideally situated within 5 miles of major highways equipped with industrial-grade roadways, these locations facilitate efficient logistics and transportation of materials. Notably, a substantial 26% of industry leads emphasize the importance of rail access, underscoring the significance of diverse and robust transportation networks in the EV battery production landscape.
EV battery production demands robust and substantial utility infrastructure. Considerable electricity demand is generally required, ranging from 75 to 400 MW, with a load factor of 60%-80%. A notable preference is expressed for sourcing this significant power from renewable sources or incorporating renewable sources into the energy mix, aligning with a commitment to environmentally sustainable practices in the industry. Simultaneously, gas consumption, ranging from 100k to 500k MCF per month, underscores the multifaceted energy needs of EV battery production. Water and sewer consumption varies based on project size, with significant infrastructure in place, but you can expect a minimum of 100,000 gallons per day (GPD) to 600,000 GPD.
Other site considerations include reviewing appropriate zoning, industrial use is required, and the chosen jurisdiction must exhibit openness to expedited permitting processes. Storage and height restrictions are critical aspects that require thorough explanation to ensure compliance and effective planning within the selected location. Furthermore, the operational framework involves a detailed process for securing an air permit, followed by a comprehensive overview of the procedures for obtaining all necessary permits and approvals. Understanding the supply chain is vital for success, with specific materials such as lithium carbonate, lithium phosphate, iron powders, phosphoric, and electrolytes forming the bedrock of EV battery production. The chosen site must not only showcase these operational capabilities but also demonstrate the presence of an adequately qualified labor pool within a 45-to-60-minute commute, ensuring a skilled workforce to drive the industry forward. Additionally, a closer look at the region’s five largest employers and manufacturers provides valuable insights into the local economic landscape, facilitating strategic collaboration and further enhancing the viability of EV battery production in the chosen location.
Site considerations matter related to location decisions for EV battery companies and their supply chain, and a corporate site location consultant can help companies and communities capitalize on this growing industry.
Contact Wade Williams at [email protected] if you have any questions regarding the EV industry or other corporate site location matters.