Georgia’s big bet on electric vehicle rollout rides heavily on state and federal backing
Gov. Brian Kemp is on a mission to make Georgia the undisputed electric vehicle capital of the nation.
The Republican governor’s ambitious plan doesn’t seem too far-fetched after the significant strides made by the state on the economic development front in the last two years, which includes four multibillion-dollar investments into building electric vehicles and the batteries that keep them running.
A growing industry has also presented a number of challenges to state legislators and agency leaders this year, including the steep costs involved in building up charging stations for electric vehicles, the high annual fee Georgia now charges to EV owners, and the continuing costs to repair and build roads with shrinking fuel tax revenue.
The state Department of Economic Development cites figures estimating that the global projection of 56 million in annual passenger electric vehicle sales in 2040 while advocacy group Environment Georgia predicts that electric vehicles could represent 10% of the market in the state by 2030.
In all the electric mobility industry will be responsible for 35 projects across Georgia to the tune of $23 billion dollars of investment in 28,000 new jobs.
“I believe this is a unique moment of opportunity for our state and for the thousands upon thousands of hardworking Georgians who will benefit from great jobs and incredible innovative companies for generations to come,” Kemp said during his inaugural address. “That’s why by the end of my second term as your governor, I intend for Georgia to be recognized as the electric mobility capital of America.
“To accomplish this goal, we are keeping our foot on the gas and I look forward to the announcements we’ll make in the near future,” Kemp said.
As Georgia’s first big venture into the electric mobility market, SK Innovation opened a $1.67 billion lithium-ion battery manufacturing facility in Commerce in 2019, followed by an expansion more than doubling its size.
Now, Hyundai and EV truck manufacturer Rivian are building the two largest economic development projects in Georgia’s history at mega sites. Rivian is in the development stage an hour east of Atlanta and Hyundai’s plant is in the works at a site near Savannah’s port.
In addition, SK Innovation and Hyundai are partnering to build a battery plant in Bartow County and another $2.5 billion is being pledged by California-based startup Archer Aviation Inc. to manufacture an electric vertical take off and landing aircraft.
“It’s the same reason we drink Coca-Cola and we don’t drink Pepsi, right?”Tim Echols, Georgia Public Service Commissioner
The electric automobile industry reaches well beyond passenger cars, as Sysco plans to convert its fleet of 150 tractor trailers that deliver food to restaurants, schools and other commercial kitchens to electric power. And federal funding will enable BlueBird to produce electric powered school buses in Fort Valley.
Yet these developments are not without their detractors who criticize the state’s generous incentive packages. For its proposed plant, Rivian Automotive received $1.5 billion in state and local incentives. Local residents have concerns about how the plant will contribute to urban sprawl, the traffic it would create and the environmental damage it could cause.
And a capacity problem could hamper the long-term viability of the electric vehicle industry: a shortage of lithium-ion batteries.
Although challenges lie ahead, Public Service Commissioner Tim Echols believes that the governor’s prediction can come true with public and private investment into clean energy to increase electric vehicle suppliers that continue to deliver on the technology’s promise. Georgia is currently behind California in the EV industry, he said.
Echols, who has owned six zero-emission cars over the years, was able to successfully press his PSC colleagues to triple Georgia Power’s Make Ready Program’s budget up to $53 million to apply toward upgrading charging stations over the next three years.
“If all of these suppliers around these EVs and others come in, I think we will be exactly what he predicted,” he said. “Then it’s simply about helping Georgians catch up to see that EVs are good for you and that these Ford F150s and these Rivain trucks can be used all over south Georgia.
“I think it may take a while to personally adopt it, but I do think it will eventually happen especially if all of this electric vehicle related businesses, buttering everybody’s bread, so to speak, in terms of giving people jobs and providing all of this tax revenue, and the economic development,” Echols added. “It’s the same reason we drink Coca Cola and we don’t drink Pepsi, right?”
Legislature takes up fees, charging stations
The electric automotive industry is expected to secure a front seat this Legislative session after a joint House and Senate study committee spent the offseason taking field trips to manufacturing sites and hearing from representatives from utility companies, state convenience store association, food service companies, automobile manufacturers and electric vehicle owners.
Committee members have compiled a 73-page report that can act as a guide for some of the proposed changes this year and in the near future.
One major obstacle is rolling out enough charging stations for people to quickly recharge their battery-powered cars in parking lots at hotels, restaurants, shopping malls and convenience stores.
Senate Majority Leader Steve Gooch said that while many electric vehicle owners will be able to charge their vehicle overnight at home, more chances need to be available for people driving from Atlanta to Savannah so they can recharge quickly during the four-hour drive.
“The convenience stores are very interested in providing the services, they want to have charging stations for their facilities,” Gooch said. “At the same time they may be losing sales or gasoline and diesel that they want to be able to offset that loss of revenue by selling electricity.”
The study committee recommends permitting businesses to sell electricity by the kilowatt hour instead by the amount of time an EV takes to charge.
The study committee also called for a more detailed analysis to determine how to offset some of the $2 billion in state fuel taxes now collected annually that the state Department of Transportation uses for road construction.
A $211 fee is currently charged to owners of small battery-powered cars, while $317 is charged to owners of commercial electric vehicles. As a comparison, the DOT brings in 30 cents per gallon from fuel taxes.
A pilot project the DOT is considering would allow drivers to track their electric car mileage and be charged based on how many miles they travel.
“The tricky part is should you charge the same for a small car that’s a four cylinder versus an Amazon truck that may drive 50,000 or 60,000 miles and weighs 15,000 or 20,000 pounds?” Gooch said. “Should they be paying the same annual fee or should they be paying a much higher fee based on the usage of the highway.”
The Ray’s highway testing ground
As part of President Joe Biden’s Bipartisan Infrastructure Law, Georgia has received $135 million charging stations and infrastructure.
An 18-mile stretch of west Georgia’s I-85 is known as The Ray and a nonprofit bearing its name has used it as a testing ground on how to make transportation safer and more sustainable.
With Georgia Power, the Ray has installed large solar panels off interstates, and with the Department of Transportation, it has conducted a traffic flow study between the Port of Savannah and Atlanta providing useful information about where charging stations should be placed for freight and passenger vehicles.
“The ability to have chargers every 50 miles it’s just absolutely revolutionary because that means this concept of range anxiety of people not being able to travel that far in their electric vehicles, we now have the ability to go farther and go longer and make longer trips,” Grizzle said.
Georgia convenience store owners have fought to even the odds with utility companies like Georgia Power. Store owners can end up with sticker shock if they can’t pass along high prices based on the peak demand amount of electricity consumed by a surge of vehicles plugging in at once.
A number of convenience store chains say that utility companies are unfairly encroaching into their territory, and that they are placed at a disadvantage.
In response, state regulators added a first right of refusal provision to the latest Georgia Power rate case that allows businesses to build their own charging stations within 18 months and within a certain number of miles of where Georgia Power is proposing to build them.
Echols said he supports the idea, but he isn’t sure it’s a good value proposition for businesses.
“They’re very expensive: $40,000 to $80,000 to build one of them and I just don’t think they’ll ever get their money back,” he said. “It really needs to be kind of a loss leader to get people in to buy yogurt or get them into the convenience store for something else.”
Ryan McKinnon, a spokesman for Charge Ahead Partnership, a coalition of businesses, individuals and organizations aiming to expand electric vehicle charging, praised the Georgia Public Service Commission for making it easier for businesses to install charger
He said that Georgia is a hub for electric vehicle manufacturing, but on the commercial side, businesses have been at a disadvantage due to utilities like Georgia Power that are guaranteed a return on equity for their investment that provides them an incentive to build charging stations.
In Georgia, most public charging stations are located off interstate exits around suburban Atlanta and within one mile of a major fuel retailer, he said.
“You see a lot of charging stations that are in the back of parking lot charging stations that are at the county library or at a bank; places like that that are just not logical natural stopping points for travelers,” he said.
Businesses support measures such as establishing a fair and transparent price point based on usage versus peak demand surcharges.
“Let’s give the private market a chance,” he said. “If they’re saying they want to come in here and compete then basically put up or shut up, which is is what we’ve been arguing for all along,” McKinnon said.
Grizzle with the Ray said long-term success of EVs will depend a lot on healthy partnerships between power companies, large corporations, small businesses and government.
“How do we work with Georgia Power? How can we work with people to make electric vehicle chargers worth their while?” Grizzle said. “If we can make it worthwhile for everybody, like all partners, everybody on the table, then that means it’ll be easier for us to get these things passed or easier for us to make these changes that we are really gunning towards.”
This story was provided by WABE content partner Georgia Recorder.