Alabama, once known for steel production and coal mining, is now home to a robust automotive manufacturing sector.
But as more and more consumers make the switch from gas-powered to electric-powered vehicles to reduce carbon emissions into the environment, some Alabama automakers and key supplier firms are stepping up their electric vehicle game.
“The Alabama auto industry is doing great,” says Ron Davis, president of the Alabama Automotive Manufacturers Association. “We have very dynamic OEM manufacturers in our state.
“We have suppliers that are engaging and participating in a transition to electric vehicles. We have the electric vehicle transition being planned by our OEMs. We’re positioned to continue to be successful in Alabama in the automotive industry,” he says.
This comes, says Davis, even as automotive manufacturing faces hefty headwinds nationwide from rising inflation and interest rates.
Currently, the production capacity of automotive assembly plants in Alabama tops 1.3 million vehicles annually, making the state among the top five producers of cars and light trucks in the United States. Mercedes-Benz, Honda, Hyundai and Mazda Toyota craft vehicles here and Toyota maintains a significant and growing engine plant as well as producing vehicles.
The state’s Department of Commerce estimates these companies together have invested around $15 billion in their Alabama assembly operations.
“For the past 25 years, the auto industry has been Alabama’s main economic engine, generating massive investment and sustained job creation in communities throughout the state,” Alabama Department of Commerce Secretary Greg Canfield says.
Already in 2023, the growth continues. South Korean auto supplier firm Samkee Corp. announced plans in early February to invest $128 million in a new plant in Tuskegee, where it will make die-cast aluminum components for engines, transmissions and electric vehicles, primarily serving nearby Hyundai.
“The industry’s dynamic growth has elevated Alabama’s profile on the international stage and powered a surge in vehicle exports that has extended the ‘Made in Alabama’ brand globally. The impact of the auto industry on Alabama has been nothing short of spectacular, and we’re confident that’s going to continue well into the future as the EV revolution unfolds,” Canfield says.
When it comes to vehicle exports, the Alabama Department of Commerce reports that motor vehicles are Alabama’s No. 1 export category; the state ranks No. 3 in the nation for vehicle exports. Final export numbers for 2022 show the vehicles reached $8.9 billion, a key element of the state’s record-setting export year.
That is up from 2021 when exports of vehicles produced in Alabama exceeded $7.7 billion.
Alabama’s exported vehicles go primarily to Germany, China, Canada, Mexico and Australia, according to the Alabama Department of Commerce.
The growth and continued investment by the automotive manufacturing industry in Alabama was evidenced by the actions of several companies in 2022.
For example, the engine plant Toyota Motor Manufacturing, Alabama, which produces four-cylinder, V-6 and V-8 engines, announced a $222 million expansion project last year. Once complete, Toyota’s investment at the Huntsville facility will reach $1.4 billion, with employment totaling 1,800, the Alabama Commerce Department reports.
Another plant, Honda Manufacturing of Alabama debuted the redesigned Honda Pilot SUV for 2023.
And in Auburn, Shinhwa Auto USA Corp. is constructing a second 400,000-square-foot auto parts manufacturing plant in Alabama. The new plant will be across from the current plant located at Auburn Technology Park West. The move is part of a $78 million expansion effort by the company to increase its output for aluminum products.
The Shinhwa plant makes parts for the Hyundai Motor Manufacturing Alabama auto assembly plant in Montgomery and a Kia assembly plant in West Point, Georgia.
But 2022 also saw several expansion projects and announcements in Alabama directly related to the EV market.
The Mercedes-Benz assembly plant in Tuscaloosa County, for example, debuted the all-electric EQS SUV in 2022 and announced that it will also produce the all-electric EQE SUV. In addition, the company opened its new EV battery plant in Bibb County.
Another automaker, Hyundai, announced its plan to assemble a hybrid version of its Santa Fe sport utility and an electric Genesis GV70 SUV at its Montgomery factory with an investment of $300 million.
Meanwhile, Hyundai Mobis, a supplier to Hyundai Motor Manufacturing of Alabama (HMMA), revealed its intentions to build a $205 million EV battery plant in Montgomery, creating an estimated 400 jobs. The plant is scheduled to start production in 2024.
Another automotive supplier, Li-Cycle, a lithium-ion battery recycler, opened a plant last year in Tuscaloosa.
“This facility will play an important role in the lifecycle of batteries powering electric vehicles by contributing an innovative sustainability solution,” Gov. Kay Ivey said in a press statement at the time.
In Coosa County, Westwater Resources and its subsidiary, Alabama Graphite Products LLC, began construction on a $202 million graphite processing plant. Refined graphite is a key material in EV batteries and other products.
But while Alabama is making some strides when it comes to building electrified vehicles, it still has some catching up to do when it comes to accessibility to EV charging stations, says a recent report by the Alabama Electric Vehicle Infrastructure Plan by the Alabama Department of Economic and Community Affairs (ADECA).
The document says, “Alabama needs more charging stations serving more strategic corridors, more communities, and more travel destinations to help fully realize all the benefits of transportation electrification.”
According to the report, Alabama currently has 48 unique Level 3 Direct Current Fast Charger sites with 77 charging ports across the state along with 195 Level 2 charging stations with 431 publicly accessible EV ports. In addition, 16 proprietary Tesla-only DC fast-charging sites with 164 charging ports exist in Alabama. Tesla owners, however, can charge their vehicles at most DC fast-charging stations.
Grant programs by ADECA and the National Electric Vehicle Infrastructure program are designed to help boost those EV charging station numbers in Alabama.
Meanwhile, interest in EVs is growing slowly across Alabama. According to the Alabama Electric Vehicle Infrastructure Plan, Alabama saw a 61% jump in the number of EVs registered in the state in 2021.
“EV registrations in Alabama have definitely skyrocketed,” says Michael Staley, president of the nonprofit Alabama Clean Fuels Coalition. The coalition has organized EV chapters and hosted special events around the state that are attended by EV drivers, Staley says.
“The best way for a consumer to learn about an EV is to talk to somebody that owns one and to see one and feel it and touch it. So those have been very successful. We organize a lot of those kinds of educational opportunities at farmers markets and other locations around the state where we encourage EV drivers to show off their vehicles and answer questions other drivers have about the technology,” Staley says.
But Davis says getting most Alabamians to switch from gas-powered vehicles to EVs will take time.
“It’s not like flipping a switch where we have internal gas combustion engines and then all of a sudden now we’re going to have EVs. I think the marketplace is going to demand all of those products over transition time and each of the OEMs, based on what kind of vehicle they produce, what the fuel economy, what kind of mixed hybrids they have. It all fits into their strategic plan for a transition to electric vehicles,” Davis says.
Gov. Ivey is, however, attempting to drive up interest in EVs through her new Drive Electric Alabama initiative.
Coordinated by ADECA, Drive Electric Alabama aims to inform and educate consumers, state and local government leaders, OEMs and others who could play a key role in bringing EV-related jobs to the state.
Last Sept. 21, under the Drive Electric umbrella, the Clean Fuels Coalition, ADECA and others even held an EV Summit meeting at the Birmingham-Jefferson Convention Center.
“I’m excited about the future of Alabama in the automotive industry,” Davis says — an excitement driven by the way OEMs, state agencies, the community college system and others are working together to support Alabama’s auto manufacturing industry.
“We’re all working together in such a nice way. That makes us a force of energy that I think is hard to model. I don’t see it in any other state.”
Gail Allyn Short is a Birmingham-based freelance contributor to Business Alabama.
This article appears in the March 2023 issue of Business Alabama.