When one thinks of American technology and innovation, Silicon Valley is usually the first place that comes to mind. But in recent years, another region of the United States is going all-in on EVs, challenging the West Coast’s sector dominance. That’s the Carolinas.
North Carolina will be home to Toyota’s upcoming hybrid battery manufacturing facility. It recently saw the opening of European battery manufacturer Alpitronic’s U.S. headquarters and charging giant Kempower’s U.S. office. There’s also Thomas Built’s electric school bus manufacturing facility, VinFast, Natron Energy and more.
Toyota North Carolina Battery Plant Construction
And that’s just one Carolina. South Carolina is seeing upgrades and expansions to plants owned by BMW and Volvo to make future EVs and batteries and, perhaps most notably, Scout Motors’ all-new $2 billion factory to make electric and extended-range trucks and SUVs.
The Southeast’s EV game is proliferating big time, to put it mildly. And much of that is thanks to the investments and tax incentives pushed by the Inflation Reduction Act (IRA), the Biden Administration’s signature infrastructure and climate legislation.
Scout Motors Factory Groundbreaking 2024 Official Photos
But there’s something else notable about the region. North Carolina voted for President Donald Trump in the 2020 election. And it’s likely that Trump could win the swing state again in 2024. South Carolina, Trump almost certainly has in the bag. And begs a question: if the region’s EV efforts flourished under a pro-EV federal administration, what would happen if different leadership was in the White House?
We don’t really know yet. Vice President Kamala Harris, the Democratic nominee, is expected to continue or even expand those policies; Trump is not, to put it lightly.
But the two states are part of a nationwide boom that few people would want to see disappear if, for example, Trump makes good on his threats to end Biden’s EV and climate subsidies. “We need to future-proof our economy and make sure we’re getting modern innovative companies here,” says Christopher Chung, the CEO of North Carolina’s Economic Development Program.
The Lay Of The Land: Why EV Manufacturers Are Going East
North Carolina’s popularity with electric vehicle ventures stems from several avenues. These include lower labor costs, cheaper taxes, proximity to coastal ports and existing car manufacturing ecosystems and a diversified workforce, thanks to local universities and technical colleges.
“We’re a manufacturing state, historically,” Chung told InsideEVs. “If you’re looking at doing EV assembly or battery manufacturing, knowing and working with a state that has a strong manufacturing history is really important.
But these factors alone aren’t enough to woo manufacturers considering the state. The rest resides within the locality’s ability to incentivize companies to set up shop. “Incentive packages are usually split at both a state and local level because typically a company is not just choosing a state to do business in, but they’re choosing a specific county and sometimes a specific city within that county,” Chung said.
While North Carolina has its arsenal to facilitate EV growth, the federal government can do even more. The 48C section of the Inflation Reduction Act (IRA) provides tax credit incentives to businesses in the clean energy space looking to set up shop in the United States. “The 48C tax credit is probably one of the most common ones,” Chung said.
Photo by: Toyota
A possible Toyota electric SUV would be powered by batteries from its new North Carolina plant.
Portions of the IRA incentivize companies to establish facilities in the United States. The next part is on the state level. If a certain state offers a competitive incentive package, then there’s a good chance the business will reside in that state. And North and South Carolina just happened to be more competitive states. In other words, the IRA is like a shiny new car dealership. Once you go inside, you’ll choose the car that best suits your needs. (You want a three-row EV with all-wheel-drive? There’s the Kia EV9 for that.)
Chung said these incentive packages are usually complex as they have to weigh out numerous factors. “So our job is to try to understand, of course, what’s the employment, investment, and the wages that a company is pledging to put here in the state,” he said. Another factor is what the company has to benefit the state.
Fact sheet about Toyota’s NC battery plant.
Take Toyota’s battery plant, for example. Given the automaker’s huge push to turn most, if not all, of its lineup into hybrids, that plant will be busy for a long time. And while Toyota has been slower than most to embrace fully electric cars, Toyota Battery Manufacturing North Carolina will be set up to support at least two EVs someday. In other words, these are long-term investments, poised to grow over decades—hardly some run-of-the-mill food processing plant.
It’s why, as NC Newsline reported recently, the state is due to receive $3.5 billion in funding from the IRA and Bipartisan Infrastructure Law for a litany of manufacturing projects including EVs.
Bi-Partisanship For Securing Investments
Despite all the EV interest, North Carolina is very much a purple state. Its liberal, blue metropolises are surrounded by conservative, rural localities. The amalgamation of regions has given the state an interesting voting history. In 2020, North Carolina voted for Republican Trump in the presidential election, Democrat Roy Cooper on the gubernatorial side, and a majority Republican rule in the state house and senate.
But Chung says the political differences have actually helped make the region more competitive. “Anytime you have two parties in control of two different branches, they’re going to butt heads on certain policy disagreements,” Chung said. “Like everyone, no one can disagree that educating our people is a good thing to do, but they’re going to have differences around what’s the best way to do that.”
Toyota Battery Manufacturing, North Carolina (under construction)
To improve and strengthen the state’s workforce, EV manufacturing simply happens to be a great avenue to do so. It’s advanced technology, and nobody can say “no” to getting these companies to relocate to North Carolina. Plus, some of these investments were implemented in deep red counties. Toyota’s battery manufacturing facility is in Randolph County, a locale with a 211% Republican voter advantage (as opposed to Democrats.)
“The more EVs are seen as job creators, the better they will do politically,” said Mike Murphy, a Republican political consultant and founder of the nonprofit EV Politics Project. “Congressmen fight like hell to keep local jobs.”
Positioning EVs as a way to accelerate the workforce, generate revenue, and “future-proof” the economy is one of the most effective ways to dismantle the political barrier.
“The politics of EVs are all tangled up because our country is so partisan,” Murphy said. “You’ve got to move the debate from the environmental stuff to jobs and competition with China.”
A More Complex Situation In South Carolina
Photo: Volvo
Less than two hours south of Raleigh and the situation gets even more complex. Volvo is adding at least 1,300 jobs to its Ridgeville, South Carolina plant just to make the electric EX90—a vehicle whose American production is even more important as Volvo’s parent company faces anti-China tariffs elsewhere. BMW’s famed Spartanburg plant, actually America’s largest car exporter, is getting a $1.7 billion investment for EV production and a battery assembly plant nearby. And Scout Motors is perhaps the biggest coup of all. It’s set to bring at least 4,000 jobs to the Blythewood area and become an ultra-important brand for the Volkswagen Group as it faces tremendous headwinds in Europe and China.
Photo by: Scout Motors
Scout Traveler and Terra Concepts
But there’s little doubt how South Carolina will vote next week. That state is heavily expected to tilt toward Trump, who has consistently promised to “terminate” what he falsely calls “Kamala’s insane EV mandate” while vowing to “rescind all unspent funds under the misnamed Inflation Reduction Act.”
So if he does, what happens to the money driving those investments now—not to mention future EV tax incentives that encourage people to buy those cars? They may well be on the chopping block, and it’s why the Biden White House is now scrambling to allocate as many of those funds as it can in case the election doesn’t go Harris’ way.
Legal experts and industry observers generally believe it’d take an act of Congress to repeal everything Trump says he wants to get rid of. But many of them also believe doing so would mean big setbacks for America in the EV race.
Push Or Pull
When it comes to governmental forces, there are industrial and regulatory policies, says Levi Tillemann, the author of The Great Race: The Global Quest For The Car Of The Future. Industrial policies “push” money and resources to a specific industry to help it grow. An example of this would be giving a tax break to an electric vehicle manufacturer for building a plant in the country. The other is regulatory policies. Regulatory policies “pull” industries up to certain standards through legal requirements. An example of this is the Clean Air Act, mandating catalytic converters.
“The state that’s led all of these efforts has been California, and the reason for that is that California had special authorities granted to it under the Clean Air Act Amendments of 1970,” Tillemann told InsideEVs. “And so [California] created this, I would say, fairly straightforward, but also extremely innovative, synthetic market for zero-emission vehicle credits, where they had the mandate, and then they allowed people to buy and sell credits amongst themselves.”
BMW Group Plant Spartanburg
The Zero-Emission Vehicle (ZEV) credit program was instrumental in Tesla’s path to success. It was an example of regulatory policy rewarding those who built clean vehicles like Tesla and fining those who didn’t. It also generated more EVs on the market. The Ford Focus Electric, Chevrolet Spark EV, and Volkswagen e-Golf are just a few vehicles that manufacturers were effectively forced to produce. Were these excellent EVs? Absolutely not, but they were nevertheless first steps that led to bigger things. And now that the U.S., Europe and Japan are scrambling to keep up with China’s advancements in the electric space, they need all the help they can get.
“So if you cut back on your industrial policy, or if you cut back on your regulatory policy, either one of those is going to have a pretty significant effect on the growth in EV manufacturing and the U.S. EV market,” Tillemann told InsideEVs. “But if you hit both of them at the same time, then you could see a really significant slowdown.”
Impacts A Trump Victory Could Have On EVs
Taking an objective look at the industry, it’s clear that governmental efforts can help shape the EV industry. Manufacturing incentives can help steer companies to build in the USA and regulatory policy will require automakers to build more efficient vehicles. But what if someone like Trump is at the helm of these policies?
Trump and his vice presidential pick, JD Vance, have both expressed distaste for the IRA and its pro-EV policies. But more recently, the former president has opened up to a future of electric vehicles—with internal combustion engine vehicles still in the fray. At a rally in Georgia, Trump said, “I’m for electric cars, I have to be because [Tesla CEO Elon Musk] endorsed me very strongly.”
Musk at Trump’s recent Madison Square Garden rally. Screenshot: YouTube
“I think the Trump thing is a little more complex than it looks like, but there’s no doubt that he is less sympathetic to EV subsidies,” Murphy said. Even Musk seemed to agree on X, though his various companies have benefitted tremendously from subsidies and government contracts alike.
But even with the IRA in place now, it could be possible for a different administration to stall its implementation process. “I would expect dramatically more narrow interpretations of a variety of tax credits within the IRA. I think that there is a very good chance that the Trump administration would simply fail to administer certain programs,” Tillemann said. “They wouldn’t appoint the necessary people or allocate the necessary resources in order to administer certain plants, certain programs that are important to innovation and to expanding EV manufacturing in the U.S.”
Can EV advocates count on Trump and Musk’s newfound bromance to change the calculus? That depends on who you ask.
“I do think that the alliance between Elon Musk and Donald Trump could have some sort of strange upside for the environmental and electric vehicle communities,” Tillemann said. “I didn’t think that it was going to have much of an impact, but Elon Musk has gone from being sort of a Trump-curious tech executive to Donald Trump’s biggest fanboy, and Donald Trump is very easily swayed by people who flatter him and people who support him in various ways, whether rhetorically or financially.”
Murphy, the political consultant, said he saw things differently. “Elon’s interests are not necessarily aligned with the EV industry. They’re aligned with Tesla,” he said. “I would say a Trump presidency is likely to add a lot of friction to government-supported EVs, slowing things down, maybe going after the tax credits or the lease loophole that help dealers offset the price.”
What Could Be Next For The EV Industry
BMW’s Neue Klasse EVs. Its South Carolina plant is expected to make six EVs by the end of the decade.
So will a Trump Administration curtail EV growth and support, if it comes to pass? Surely his role would have some impact, but it’s too soon to say what precisely will happen. But here’s what we do know. Electric vehicle sales are steadily growing, states love electric vehicle jobs, and China is unrelenting with its technological progress.
As Ford, General Motors and others still grapple with making EVs and batteries profitably, it’s clear that there are growing pains on the path to electrification. Any assistance from Uncle Sam—not unlike the stiff tariffs keeping BYD and the like out of our market for now—would be greatly appreciated. And interestingly, both parties have supported protectionist measures against Chinese EVs in the form of tariffs.
“Laws are kind of like a coloring book,” Tillemann told InsideEVs. “You have all of these outlines, but then the Administration is responsible for filling in the colors. And depending on what colors you use, that picture is going to look very, very different at the end of the day.”
Andrew Lambrecht is an industrial engineering student, TEDx speaker, and freelance writer based in the Carolinas. He has previously written at Forbes Wheels and currently co-hosts The Current Review EV and technology podcast. Andrew is a former intern at Lucid Motors, where he worked on the charging validation team.