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August 11, 2022 Article

Electric Avenue: Electric Vehicle Federal Policy and Demand Drive Construction Boom

Matt Arvin

Electronic vehicles have been around for over 130 years. Nonetheless, it is only over the last 15 years that the confluence of dramatic changes in technologies, public policies, and consumer demand that electric vehicles have become mainstream. Now, we appear poised for a boom in the availability and use of electronic vehicles. But first, there must be a construction boom to build manufacturing facilities for electronic vehicles and the batteries on which those vehicles depend. This article reviews the short but very impactful history of federal policies in support for electric vehicles.  These policies helped lay the foundation for the construction of the production facilities needed to transition the widespread use of electric vehicles from a futuristic goal into reality. As the balance of the article describes, the future is here with multiple, massive multibillion-dollar construction programs necessary to meet the demand for vehicles and batteries.

The Policies of Electric Vehicles

The genesis of federal policies for electric vehicles arguably occurred early in President Obama’s first term.  In March of 2009, President Obama announced through the Department of Energy, “the availability of $2.4 billion in funding for America’s manufacturers towards producing the next generation of plug-in hybrid electric vehicles, and the advanced battery components that will make these cars run.”  A few months later, in October, Obama signed Executive Order 13514 —Federal Leadership in Environmental, Energy, and Economic Performance. This executive order pledged for federal agencies to “reduce the use of fossil fuels by using low greenhouse gas emitting vehicles including alternative fuel vehicles.”

A year later, in 2010, a Democrat-led Congress followed Obama’s lead and passed the Electric Vehicle Deployment Act of 2010 which amended the Internal Revenue Code of 1986 to include a tax credit to taxpayers that buy a new qualified plug-in motor vehicle.  As of 2022, purchasers of new electric vehicles are eligible for a rebate up to $7,500 depending on the make and model of the vehicle.

Moving forward to the Biden Administration, President Biden has faithfully continued Obama’s goal for clean energy use by the federal government.  In 2021, President Biden signed two important executive orders regarding the federal government’s use of electric vehicles.  In January, he signed Executive Order on Tackling the Climate Crisis at Home and Abroad which included section 205, The Federal Clean Electricity and Vehicle Procurement Strategy. And in December, Biden signed Executive Order - Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability.  Within these two orders, the Commander in Chief pledged for the federal government to have “100 percent zero-emission vehicle acquisitions by 2035, including 100 percent zero-emission light-duty vehicle acquisitions by 2027.” 

Within the first week of his presidency, President Biden also promoted his electric vehicle agenda by restricting oil and gas drilling and manufacturing practices.  In Biden’s first day in office, via executive order, he revoked the federal permit allowing the construction of the Keystone pipeline. That order stated “In 2015, following an exhaustive review, the Department of State and the President determined that approving the proposed Keystone XL pipeline would not serve the U.S. national interest.  That analysis, in addition to concluding that the significance of the proposed pipeline for our energy security and economy is limited, stressed that the United States must prioritize the development of a clean energy economy.”  Also in that Executive Order, President Biden “reinstated Executive Order 13754 and the Presidential Memorandum of December 20, 2016 which restored the original withdrawal of certain offshore areas in Arctic waters and the Bering Sea from oil and gas drilling.”  A week later, Biden signed an Executive Order on Tackling the Climate Crisis at Home and Abroad.  The Order stated that the Secretary of the Interior “shall pause new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices.”

And by late last year, it seemed like Congress and the Biden administration were beginning to work together to advance electric vehicle policies.  The Biden administration last February “unveiled its plan to award nearly $5 billion over five years to build thousands of electric vehicle charging stations.  Congress approved the funding to states as part of a $1 trillion infrastructure bill passed last November.”  However, with the Senate striking down the Build Back Better Act last December, how much Congress and the President will get done together to advance electric vehicle policies remains uncertain.

Construction Begins to be Able to Produce More Electric Vehicles

In January of 2020, GM made a bold investment of $2.2 billion into their Hamtramck facility to build all-electric trucks and SUVs. GM’s creativity and ingenuity led to the idea of not building greenfield projects for electric vehicles; but, instead, retrofitting existing facilities to be able to build electric vehicles.  On paper, this initiative was to save the company billions of dollars while they moved towards their goal to become leaders in the electric vehicle market. The Hamtramck facility was soon to be renamed Factory Zero and construction quickly commenced. 

Telsa soon followed suit with owner, Elon Musk, announcing in July of 2020 that ground was broken in Austin, Texas on a new $1.1 billion “Gigafactory” with a planned 4.3 million square foot footprint.  And in October of 2020, shortly after $139 million of federal funding was granted from the Department of Energy to General Motors to invest in electric vehicles in July, it was announced that $2 billion worth of construction would, in short time, begin at GM’s Spring Hill facility in middle Tennessee.  This ambitious project included both: upgrades to their existing facilities and the construction of several new shops. 

Fast forward more than a year to the end of 2021, and the construction projects at the Gigafactory, Factory Zero, and Spring Hill were all successfully completed.  By December of 2021, both Tesla’s Model Y at the Gigafactory and the first EV Hummers at Factory Zero rolled off the assembly lines.  Soon afterwards, the new Cadillac LYRIQ went into production at Spring Hill in January of 2022.   Due, in part, to the construction successes of Spring Hill and Factory Zero, GM in January of 2022 stated that they want to only sell EVs by the year 2035, and pledged to spend $4 billion on construction (which is set to begin in July of 2022) to upgrade their Orion Township facility into an EV facility.

GM’s Battery Projects Kick Off

Overseas chain of supply issues have plagued many manufacturing sites within the last couple of years.  And as an attempt to combat these issues, GM has smartly taken measures to create their own supply chain regarding battery production to be able to mine lithium, process raw materials, and manufacture batteries all right here in North America.       

In December of 2019, GM announced their partnership with LG Energy Solutions (the partnership was renamed to Ultium Cells). Presently, Ultium Cells is in construction of their first three battery plants: (1) a 2.8 million square foot facility, in Lordstown, Ohio which broke ground in May of 2020, (2) a $2.3 billion battery plant in Spring Hill, Tennessee which broke ground in August of 2021, and (3) the third battery plant in Lansing, Michigan that just recently broke ground this last spring.  Undoubtedly, more of these battery plants will continue to be built as more EVs are manufactured.

But, what about the all-important lithium needed to be able to make the batteries?  In 2021, it was determined that the Salton Sea, just outside of Palm Springs, California, hosts a possible treasure trove of lithium (with a suspected 15 million tons of lithium).  That April, Controlled Thermal Resources, a Lithium resource and renewable energy company, began construction on drills to be able to mine the lithium out of the Sea.   Soon afterwards, in July, GM partnered with Controlled Thermal Resources as an investor to have first rights on any lithium mined out of the Sea by CTR.

And this last March, GM and their joint venture partner, POSCO Chemical, announced that construction began immediately on a new $400 million facility in Bécancour, Quebec that will use raw lithium to produce cathode active material (CAM) for GM’s Ultium batteries.

Ford and Toyota Jump into the Mix

Not to be outdone by GM, rival Ford jumped into the EV landscape in September of 2021 and announced $11.4 billion worth of construction in west Tennessee and central Kentucky.  Called BlueOval City, the west Tennessee complex will be constructed on a nearly 6-square-mile site in west Tennessee and build next-generation electric F-Series pickups and advanced batteries.  The Kentucky project called the BlueOval SK Battery Park, sitting on 1,500 acres, will build two battery plants in central Kentucky.  Recently, site preparation began at both the Tennessee and the Kentucky projects.  In December, Toyota dove into the EV waters announcing they will be building a $1.3 billion battery plant in the Greensboro, North Carolina area.  These projects are just getting started and will continue for years providing, jobs for thousands of construction workers for years.


Due to the recent federal policies and the push of electric vehicles from automobile manufacturers, it appears that the demand for EV will not be slowing down anytime soon.  As demand continues to increase for clean, energy-independent, vehicles, more construction projects will undoubtedly continue which will bode well for the construction industry for years to come. 

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Matthew T. Arvin

Mount Juliet, TN | Division 5 (General Contractors)