As electric vehicle and battery plants sprout across the South, Chattanooga is poised to be a leader in a major power shift in American transportation.
A University of South Florida expert on growing innovative industries predicts that Chattanooga could become the "buckle of the battery belt" to power the growing electric vehicle market.
With its relatively cheap and abundant power, its high-speed internet and transportation networks and its long-standing manufacturing roots, Chattanooga could be at the center of one of the nation's fastest growing industries, according to USF professor Tom Waters, assistant director of startups for the university.
"The Tennessee Aquarium highlights the city's reputation as an environmental thought leader," Waters said in a recent article in Drive Electric Tennessee. "Now, with a fortuitous technology foundation and a healthy measure of topographical luck, it could benefit from one of the most significant pivots in industrial history. If Chattanooga were to take the lead across the regional EV ecosystem, it could be groundbreaking."
Waters said Chattanooga is ideally suited to tap into what experts project will be a $134 billion market for EVs and batteries by the year 2027. In the emerging electric vehicle industry, Waters said the development and production of batteries is key and Chattanooga is located in the midst of where most of the U.S. battery production is planned.
"One city has an array of competitive advantages to make it the 'buckle' of this battery belt," Waters said. "That is Chattanooga, also known as Gig City."
While the multi-billion-dollar investments by major automakers to make electric vehicles are gaining the most attention, Waters argues "batteries are going to be the linchpin" to effectively replacing gas-powered cars and trucks with electric-powered vehicles.
"When you look at all of what is entailed to develop and produce batteries, I think Chattanooga has all the pieces in place," he said.
Waters has taught and researched innovative products and trends for the past 33 years after graduating in 1990 from the University of Tennessee at Chattanooga and working at BASF in Chattanooga. In a telephone interview, Waters said he singled out Chattanooga as a potential leader in battery development because of its favorable location, infrastructure, cost of living, transportation, labor and support from the Tennessee Valley Authority.
Chattanooga's high-speed fiber optics network and Smart City technology will be key as electric vehicles move to become autonomous vehicles, he said.
Chattanooga is already home to the largest U.S. production and development facility by the Australian battery supply maker Novonix. In 2019, Novonix opened a facility in Lookout Valley and then acquired the former Alstom manufacturing plant on Riverfront Parkway two years later. Novonix spent about $160 million to purchase and retrofit the 400,000-square-foot former Alstom factory, often called "Big Blue," to produce synthetic graphite for battery manufacturers.
By developing and making such products in the United States, Novonix was selected earlier this year to receive $150 million in federal grants under the provisions of the Inflation Reduction Act designed to bring more of the battery supply chain to America for the growing electric vehicle market. Novonix is considering sites in Chattanooga and other cities to invest up to $1 billion in a production facility to make its synthetic graphite and other battery component materials.
Last month, Novonix announced it has entered into an agreement with one of the world's biggest battery manufacturers, LG Energy Solution, to develop an artificial graphite material at Novonix's Chattanooga facility on Riverfront Parkway.
"This agreement demonstrates our leading position to establish a supply chain for high-performance artificial graphite for the battery industry in North America," Novonix CEO Chris Burns said in an announcement of the joint development.
Piedmont Lithium also plans to break ground this year in McMinn County on what will be the largest lithium processing plant in the nation. By 2025, the $582 million plant is expected to produce lithium hydroxide for half a million cars a year.
"Raw material can also be shipped into three port facilities on the Tennessee River above and below Chattanooga," Waters said in the Drive Electric article. "With the 2022 Inflation Reduction Act requiring more EV manufacturing to be done domestically, supply chain and distribution are going to be critical to industry success."
The act, passed last year with only Democratic votes in Congress, contained $375 billion to fight climate change. It offers a $7,500 tax credit for new EV purchases if the batteries contain U.S. materials.