Georgia tries to become leader in an industry that’s no sure thing

Rivian will start building a $5 billion factory next summer in Atlanta’s eastern exurbs to manufacture electric trucks and SUVs, in what Gov. Brian Kemp has called the largest economic development project in state history. SK Battery America is nearing completion of a $2.6 billion EV battery plant northeast of the city. Many EV suppliers are expected to follow close behind.

But only about one in 50 cars sold in the U.S. these days is an EV, and Georgia is no different. An EV also is more expensive to buy than gasoline-fueled cars. And if you want to buy a new one, it might not arrive for weeks or months. Rivian’s R1T truck starts at around $70,000 — and if you order it now, you won’t get it until 2023.

Georgia has 1,500 EV charging stations, seventh out of 50 states and the District of Columbia. Metro Atlanta has about 1,110 of them, the third-highest among U.S. metro areas, according to real estate data provider Yardi Matrix.

Outside Atlanta, good luck. On I-16 between Macon and Savannah, a 170-mile stretch, drivers pass only four charging stations just off the interstate, according to the website PlugShare.

Vanessa Miller, an attorney in Detroit who advises automotive companies on supply chain issues, said a chicken-or-egg situation is holding things back.

“It’s hard to get the momentum you need because a driver isn’t going to buy an EV until they know they can keep it running,” she said. Companies won’t install more charging stations “because you don’t know how many EVs there are going to be.”

State, federal governments make electric push

Kemp has made EV a priority, forming an EV task force in July to “ensure that our state is positioned to continue leading the nation in the rapidly growing electric mobility industry.” The group’s report may be released in early 2022.

Georgia gave SK Battery $300 million in grants, tax breaks and free land. The state has probably offered a larger bounty to Rivian, though details haven’t been disclosed. Georgia has only one combustion-engine auto plant, Kia, after rivals chose neighboring states to build traditional auto plants.

Wall Street investors and automotive industry analysts predict the EV market will soon be red hot. Industry tracker IHS Markit projects that EVs on U.S. roads will rise from 1.5 million vehicles now to 9.3 million by 2026.

Credit: Steve Schaefer

Credit: Steve Schaefer

At Tesla, the largest EV maker, yearly revenue grew from less than half a billion dollars in 2012 to more than $30 billion last year. It reported its first quarterly profit this summer. Rivian’s November IPO valued the company at more than $100 billion, more than either Ford or General Motors.

Governments have set lofty goals for converting to EVs in a push to combat climate change. President Joe Biden wants to cut greenhouse gas emissions by half from 2005 levels by 2030, in part by cutting the price of EVs by $12,500.

Corporations want to oblige. Amazon has ordered 100,000 electric vans from Rivian. UPS will buy 10,000 electric vans from British company Arrival. Hertz and Enterprise Rent-a-Car have said they’ll add more EVs to their fleets.

A federal infrastructure program will provide $7.5 billion to install hundreds of thousands of EV charging stations nationwide. Funds will likely be available first-come, first-serve, though details haven’t been released, said Brandon Jacobs, regional vice president of sales at charging station provider Blink.

But there’s no guarantee EVs will become the dominant mode of vehicle transportation in the U.S., or at least not as quickly as some predict, Jeremy Michalek, head of the Vehicle Electrification Group at Carnegie Mellon University, wrote in a recent column for MarketWatch.

Ford, GM, Mercedes-Benz and other automakers with big EV plans may run into production problems that delay product launches or force recalls. Volkswagen delayed the release of its ID.Buzz electric microbus from 2022 to 2023. Chevrolet in August recalled all 141,00 Chevy Bolt EVs due to fire risks. Rivian warned in December it would fall short of its 2021 production target, sending its stock price lower.

EV sales have already captured the low-hanging fruit of consumers who are early adopters of new technology, Michalek said. Other customers may put up more resistance, especially if the price remains high. The gas-powered Hyundai Kona SUV starts at $20,950. The electric version starts at $34,000.

Mainstream consumers “aren’t as driven by environmental and technology-oriented lifestyles and have other priorities and constraints,” Michalek wrote.

EV drivers face plenty of speed bumps

Today’s market for EV sedans and trucks is so tiny that it barely registers. In Georgia, EVs are 1% of all vehicles, and the nationwide state average is 1.5%, according to the U.S. Department of Energy. New EV sales account for 2% of all vehicles, according to Automotive News.

California is tops with about 5.2% of all vehicles powered by electricity. In Georgia’s neighboring states, it’s exceedingly rare to see an EV on the road. In South Carolina, 0.5% of vehicles are EVs, and in Alabama it’s 0.4%.

EV companies say it’s mandatory that charging stations become more accessible and not just inside wealthy consumers’ home garages. Charging stations “must be conveniently located where drivers live, work and play,” EVBox, a Dutch maker of charging stations, said in a recent regulatory filing.

The average range for all EVs is about 194 miles, according to EVBox. That’s not too far behind gas-powered cars, which can travel 300 miles or more before running on empty. And EV range is expected to keep climbing. Tesla models top 300 miles and Rivian vehicles are expected to have a range of at least 300 miles.

But unlike gas stations, many parts of Georgia are EV charging deserts. No charging stations are located along four-lane U.S. Highway 441 from McRae to the Florida state line, a 116-mile drive. That’s one mile more than the range for an electric Mini Cooper SE that is fully charged.

The dearth of charging stations has given rise to range anxiety.

Marshall Norseng drives his 2021 Tesla Model Y Long Range 50 miles a day commuting from his Midtown home to his Duluth office at Banyan Hills Technologies. His home charger provides enough juice to last two or three days and he’s never run out of power on the road.

Interstate travel offers a much-bumpier ride. On a recent trip to the Midwest, Norseng carefully planned his stops for recharges. Those stops turned out to be unlike a quick trip to a gas station.

“If you’re driving to the Midwest and you stop in Chattanooga at a charging station and they’re all full, you have to sit and wait,” he said. “You don’t have a choice.”

Some waits at EV charging stations can be royal time sucks.

A gas-powered vehicle typically takes fewer than 10 minutes to refuel. An EV plugged into a high-speed charger takes about 50 minutes. So-called Level 2 chargers, the most common type, can take six to 10 hours to recharge an EV.

“You’re not going to have people who are going to want to hang out at a rest stop for two hours waiting for their car to be recharged,” said Miller, the attorney.

Experts say that charge times will become less of an issue if there are more charging stations. An army of startup companies are competing to capture that market by selling to homeowners, local governments, retail establishments, hospitals, apartment complex owners and others.

SemaConnect has focused on placing Level 2 chargers in disadvantaged communities since they’re cheaper than fast-charging models, said Stephen Carroll, vice president of marketing. “Level 2 charging stations will be key to making EVs available” to those communities, he said.

The Bowie, Maryland, company declined to disclose the price of its Level 2 charging station, but said its at-home charger is priced at $699.

Cox Automotive, a unit of Cox Enterprises, last year installed 32 charging stations at the Metropolitan Parkway location of fleet management provider Pivet. It’s one of the biggest charging stations on Atlanta’s southside.

Cox Enterprises, owner of The Atlanta Journal-Constitution, owns a 4.7% stake in Rivian and supplies services to Rivian. Sandy Schwartz, a Cox executive who oversees the AJC, is on Rivian’s board of directors and holds stock personally. He does not take part in the AJC’s coverage of Rivian.

More charging stations are coming, said Rich Simmons, a research engineer at Georgia Tech’s Strategic Energy Institute. The recently approved federal infrastructure bill has earmarked $135 million to Georgia for installations.

Other incentives are available. Georgia Power and Cobb EMC offer $250 rebates for the purchase of at-home EV charging stations and offer discounted rates to residential customers for overnight power if used to recharge EVs.

But Georgia doesn’t make it easy for consumers to purchase EVs. State lawmakers blocked legislation that would allow EV makers to sell locally without going through a franchise dealer. Politically powerful auto dealers lobbied to kill the proposal. State lawmakers granted Tesla a waiver in 2015 letting it sell cars directly to consumers. In exchange, Tesla agreed to open no more than five stores in Georgia.

In 2015, Georgia lawmakers declined to renew a $5,000 tax incentive for EV purchases and added a new $214 yearly registration fee on top of the $20 yearly fee assessed on gas vehicles. Lawmakers added the EV fee to make up for owners not paying gasoline fuel taxes.

Buying a new EV is a case study in delayed gratification. Used Teslas and Nissan Leafs are being offered for sale around metro Atlanta. But if you want a fresh one from the factory, the wait for the cheapest Tesla sedan can be up to 10 months. Consumers must wait weeks or months for other EVs, too.

UItimately, if the potential Rivian manufacturing facility near Covington is to be successful, Georgia and the nation need to get things up to speed, said Miller, the automotive attorney.

“I don’t know which comes first, more charging stations or more EV sales,” she said. “But they both need to be moving forward and they need to be moving forward more quickly than they are.”