(The Center Square) – Tennessee continues to subsidize the electric vehicle manufacturing business in the state, most recently acknowledging $2 million in subsidies for Enchem America, which plans to spend $152.5 to create electrolyte manufacturing operations in Brownsville.
The electrolytes are used in electric vehicle batteries and the facility will be at the I-40 Advantage Industrial Park, which recently received a separate $1 million grant for access road construction and sewer infrastructure.
The subsidy joins the $884 million Ford Blue Oval City electric truck subsidy and the $78 million in subsidies the state has given to the Ultium Cells plant in Spring Hill with Ultium planning to employ a workforce of 1,700 in Maury County.
More recently, Magna announced it plans to build three manufacturing facilities in the state to supply Blue Oval City, with two at the West Tennessee Megasite adjoining Ford and the third in Lawrenceburg.
Subsidies for Magna have not yet been released and the State Funding Board canceled its July meeting, where it would normally approve those subsidies.
Tennessee gave 6K Energy Tennessee a $1.75 million incentive for its battery material manufacturing plant in Jackson after the company received a $50 million federal Department of Energy grant for the $166 million plant.
Tennessee’s Department of Community and Economic Development continues to tout the subsidies as being necessary to bring the electric vehicle facilities to Tennessee.
But those who study those subsidies academically question if that is true.
That research has shown that the subsidies benefit politicians in both political donations and votes more than they impact the economy.
With electric vehicles, University of Texas professor Nathan Jensen previously told The Center Square the main reason to give incentives to vehicle plants is because they tend to have lots of high-paying jobs and deep supply chains for other local companies that manufacture vehicle components.
But it’s not clear there are any benefits to giving subsidies for EV manufacturing, but the subsidies have been huge as states do things such as pay for the infrastructure as megasites are built, and then also hand out subsidies when companies agree to occupy the megasite.
“With EVs, these are not established companies sometimes and they have much shorter supply chains,” Jensen said. “Which is the whole benefit of EVs, they’re simpler devices.”
