https://apnews.com/article/hyundai-georgia-electric-vehicle-...
https://www.reuters.com/business/autos-transportation/commit...
Not to mention spending a lot on lobbying against clean air regulations aroun the world https://thedriven.io/2023/05/11/toyota-under-fire-for-anti-c...
https://www.forbes.com/wheels/news/kia-hyundai-car-thefts-se...
Every manufacturer has got a story at this point.
Not to devil's advocate, but it's tough to prove a negative. All we can say for sure is that they've not been caught yet.
Georgia and South Carolina tend to be the poorest states. The Poverty rate is around 14.5% for both. Compare that to California where the poverty rate is 12.5%. Though the poverty rate is lower, California has more people in poverty than Georgia and South Carolina combined. Anyway, using the word "impoverished" is grossly misleading.
Problem is, it's not paying off - the state isn't benefiting overall from it, and as soon as they stop providing these sweetheart tax breaks and freebies, comopanies will pull up and move to the next state willing to do so
It's more likely that southern states are willing to throw huge incentive packages to these manufacturers. Probably not so much on the coasts or the northern states.
Also, unions are less common in the south; those states tend to be right-to-work states.
Finally, you used the word "impoverished", which is ridiculous. But wages are lower in the south so that is probably another reason.
For context: Tesla is guiding for $10+B a year capex spending for the next 3 years.
Nevada factory took $6.2B and Tesla plans to spend additional $3.6B
Toyota is still under-investing in EV. $1.3B is nothing.
Toyota has been good to the area.
Off topic, but is there a popular tech meetup in the state? Moved back a year and some change ago and would love to get more involved.
I know people around these parts think that Tesla has uncovered some magical factory building ability, but can you even consider the fact that maybe Toyota knows what they are doing?
>Toyota is still under-investing in EV. $1.3B is nothing.
This is one factory.
Not a Tesla fanboy (I'm turning mine in for a Rivian), but the OP wasn't saying this, not sure how you got that conclusion. They are saying for a car company they are (1) way behind and (2) any investments they are making won't reach fruition for years, nor likely make a dent in the industry.
Outside of MB and the Chinese EVs, the design of Tesla motors is far superior. Their build quality and finishing is awful however - something the traditional players do really well.
Telsa had to deploy their capital very efficiently in a capital intensive industry. Say their bet on the Shanghai factory, despite obvious IP leak risks and spawning deadly competitors like BYD, was their only choice to reach scale at a low cost.
Do you really think this $1.3B is Toyota's entire capex in EV?
When you run a company as large and old as Toyota, you always hedge your bets. There are some other options to battery-powered electric vehicles (hydrogen IC). They are currently not as mature but anyone running something as big as Toyota needs to hedge against that sort of outlier tech. If Toyota abandoned IC, got rid of its IC production lines, they would suffer hugely if hydrogen IC one out as the green tech. All the major car companies do such things. That's why they have survived as long as they have.
Would Tesla survive if a new hydrogen storage killed the market for battery-powered cars? Toyota has seen and survived a few such revolutions.
As a hybrid technology, it has a case. If you run 80% of the time on battery and 20% of the time on hydrogen at 50% RTE, you burn 120% of the fuel. But if you weigh 30% less, you could end up saving energy. The up to 60% efficiency of the fuel cell is losing energy as heat, and people like to run the heater, so some of that energy isn't lost in appropriate climates. And of course, refueling is faster for road trips. The best system weight is probably for the experimental direct-ammonia alkaline membrane fuel cells, assuming it's possible to stabilize them, because ammonia fuel systems (about 100 psi) are much simpler than hydrogen systems (about 10000 psi!). So there's a little room left for the hydrogen fans. But it's fundamentally a battery-powered car most of the time.
the world is not only southern California and Sweden.
I would also add since insurance companies don't want to insure the transportation of batteries in container ships, it makes it difficult for Toyota to produce electric cars in all regions, it would mean they would always need to have a battery factory nearby. https://toyotatimes.jp/en/toyota_news/1055_1.html#anchorTitl...
The same infrastructure they need for everything else in their life. I bet they have way better access to electricity than they do hydrogen. Or even gasoline, frankly. Solar panels are cheap.
That sounds really interesting, I'd love to learn more. What such revolutions has Toyota survived?
It's already bad to have any sector that is protected from competition (foreign or domestic), why look to expand it?
Economics, Neoliberalism is dead. The pandemic killed it. Policy makers well understand the economy can tolerate a lot of disruption.
Politics: Dispossessed voters turning to fascism has sharpened politicians and sane business leaders minds.
Global Warning and new Tech: Solar, wind, batteries, and the need to faze out fossil fuels creates risks and opportunities. Risks will be born by those that try business as usual.
Increased automation: Low skilled dirt cheap labor is less important than it was 20-30 years ago. That changes the balance point between low cost offshored labor and the pain in the ass that offshoring is.
>But people might be more happy walking, biking, etc.
No scenario where division does not increase especially after this upcoming election.
I dont quite understand why the sales of EVs in the US is considered to have flattened out according to some statistics.
Politics. Some people want it to be true, so they conflate an easing of the growth rate as an actual rate reduction. It could also be innocent ignorance of statistics.
The real hang up with EVs right now is primarily price. They're just reaching the point where TCO is a wash. Historically, most people are extremely responsive to fuel cost advantages, so as the capital cost comes down most people will switch. At least the ones who can charge at home, which is most.
I do feel bad for people who live in places with high electricity prices, like California and Massachusetts. Makes it harder to win on TCO, but at least the convenience factor is still there. But for those who can access sub-10 cent per kWh pricing, it's nice to spend a few hundred dollars per year for fuel.
I think you need a blend of solar for that
https://www.energybot.com/electricity-rates/
The cheapest in the country is $0.1122/kWh in Utah. The average is $0.17/kWh
The real point is that Tesla has been driving prices lower than other manufacturers are willing to stomach, and that resistance to price matching shows up as cars sitting on lots.
Update:
People who may not have been following closely what Biden has accomplished during his Presidency might have questions.
In this case, the Inflation Reduction Act specifically has credits to encourage battery manufacture in the US.
https://www.orrick.com/en/Insights/2022/11/Section-45X-of-th...
More generally, the IRA and the Infrastructure Investment and Jobs Act, and the CHIPS act has encouraged investment in US manufacturing, which is surging.
https://www2.deloitte.com/us/en/insights/industry/manufactur...
If you look at growth charts in US factory capital it started spiking just before the signing of CHIPS act which was pitched to congress in 2019, which was a bipartisan effort seeded from the Trump admin.
https://en.wikipedia.org/wiki/CHIPS_and_Science_Act
And the Infrastructure Investment and Jobs Act which Biden admin pitched to congress, which also got pretty smooth bipartisan support:
https://en.wikipedia.org/wiki/Infrastructure_Investment_and_...
But it's success will be defined on how successful the factories are, not just how many billions/trillions of free $$ the US gov gives to megacorps to prop up these projects. We've seen many, many gov-incentivized factory announcements that went no where. Or worse wasted a ton of time & money of local govs + small town employees. The Obama admin had a few really bad examples of this.
Indeed. China had even more examples, but overall they found the winners and boosted them. The US instead defunded and now China produces 80% of all solar panels in the world. It's similar for VC firm, for example, they'll invest in 10 companies and expect only a couple to be profitable.
> If you look at growth charts in US factory capital it started spiking just before the signing of CHIPS act which was pitched to congress in 2019, which was a bipartisan effort seeded from the Trump admin.
Do you have those charts available? I was initially going to give a commendation for pointing out the Trump's administration's role in the Chips act, but... the Chips act was passed in late 2022! "The bill was signed into law by President Joe Biden on August 9, 2022." [1]
What's more, while the CHIPS act was initially bi-partisan, it passed in a relatively partisan vote: "Every senator in the Senate Democratic Caucus except for Bernie Sanders voted in favor of passing the CHIPS Act, and they were joined by seventeen Republican senators" [1]
Bottom line, seems like this bill was presented to Senators* in 2019 and then took time to work its way through Congress. It does not seem the Trump admin had much to do with this (I would more says the CHIPS act was seeded from an initial bipartisan effort that originated in the Senate; there's no mention I see that the executive branch had anything to do with it in 2019; if anything, it seems that congress of 2019 and whatever role the executive had at the time both _failed_ to get the CHIPS act through; it was the next congress that got it done in 2022)
[1] https://en.wikipedia.org/wiki/CHIPS_and_Science_Act
* I'm not entirely sure if 'presented' to senators means there was an executive branch role. My reading of the wiki article is that it sounds like the original 2019 bill originated in the Senate. I just don't see anything that mentions the executive's role in 2019 or 2020.
But it is true that the CHIP had bipartisan support, but the ones who supported it were not MAGA types, but people like McConnell.
https://www.orrick.com/en/Insights/2022/11/Section-45X-of-th...
More generally, the IRA and the Infrastructure Investment and Jobs Act
https://en.wikipedia.org/wiki/Infrastructure_Investment_and_...
https://www2.deloitte.com/us/en/insights/industry/manufactur...
There's also the CHIPS act.
By the way, anyone active in the green tech space knows that the IRA has been an absolute game-changer.
This was something the President activity campaigned on (Build Back Better), pushed through Congress, and signed into law as The Inflation Reduction Act.
While it did little to reduce inflation (outside of medicine), it was a massive win for people who wanted more investment in clean power generation, more funds for the ACA, lower drug prices, and higher taxes on certain corporate entities.
First this HN post: Toyota to invest $1.3B in Kentucky factory to build battery packs and new EV
A few lines below that: Toyota Refused To Hop On The Electric Vehicle Bandwagon, And It Paid Off Big Time [1]
We'll see where the chips fall but thus far it seems Tesla is one of the few western companies which manages to profitably produce and sell consumer EVs. I suspect Chinese companies like BYD run at a profit as well but it is hard to get access to reliable data. Volkswagen seems to be aiming for 'profit parity for EVs' in 2025 but they seem to have a long way to go [2].
[1] https://dailycaller.com/2024/02/07/toyota-2023-fiscal-year-3...
[2] https://www.reuters.com/business/autos-transportation/volksw...
Sometimes investment makes sense, and then things change and it doesn't make sense anymore. That's fair, isn't it?
These empty promises are how we ended up electing Trump the first time and it's virtually guaranteeing that we'll elect him a second time.
Rural Kentucky is in horrible shape and a lot of people here were placing hope in this, much like they have so many other empty promises from their leaders, so at least stop acting surprised when the consequences show themselves.
The 30% number you cite could be true but perhaps in order for Chinese (or any other country) manufacturing to be economical perhaps it needs to be 60%. Mexico is actually important here.
Still, in my eyes that only makes it more intriguing how they bridge the cultural differences, since whatever they are doing seems to be working.
I was just quoting what the documentary said. There was so much contention between the management and the workers in the American glass factory featured in the documentary. In the end, the management hosted a competition between the American workers and the Chinese workers. Chinese workers won with a big margin.
What metrics is this based on?
I'm pretty sure every country says that about themselves. It's more a statement of national pride than of fact.
The Georgetown plant currently produces Camry and Rav4.
You might be on to something there. It would certainly explain the size of the investment. A $1.3B plant might not build a lot of EVs, but it could build quite a few PHEVs.
kWh makes sense if your goal is to stimulate US battery production but I really wish there were an all-electric range requirement, A hypothetical 6.8kWh Prius Prime would get more range that the 21kWh Wrangler 4xe.
https://www.irs.gov/credits-deductions/credits-for-new-clean...
And it most often results in the Winner's Curse: the entity providing the greatest subsidies win's the "investment", but they give up so much in the process that the economic benefits are wiped out.
See: Tesla in Buffalo, VW in Ontario, FoxConn in Wisconsin.
Tesla in Sparks NV, BMW in Greer SC, or Mercedes in Alabama and SC? It seems like those have more than paid for themselves by now. In at least one of those cases, they've had huge regional impacts.
AFAIK - they got $3B in FUTURE benefits - of which none came to fruition.
Foxconn delivered nothing and also got almost nothing (~1% of that $3B).
Yeah - it was a dumb political stunt - and it unfortunately worked for the time. But it wasn't the massive financial disaster people think it was.
When everyone else is subsidizing you have to subsidize too or you lose.
https://www.kentucky.com/news/business/article143755074.html
Toyota has been moving ops to states with lower cost of living for awhile now. Toyota corp in USA shifted ops from CA to TX a decade back. Many workers hate or regret the move. C-level executives are excited because they pay less in state taxes. Probably even got a nice deal on the land.
[0]https://www _ copilotsearch _ com/posts/states-with-the-most-electric-vehicles/
Seems like a smart place to build your own batteries to me.
Apple opened up shop outside of Austin (ie, not Travis County) because of lower taxes and more incentives provided by other county. Multi Trillion dollar company by the way. Amazon has been opening up warehouses in the sticks, soaking up all of those incentives from those desperate small towns looking to giveaway the land for a couple of decades in exchange for short term gains (mayor/city council able to say, we brought X jobs to Y town!1). Yet another multibillion company taking advantage of the desperate.
What do the people get in return? Getting the opportunity to work shit hours in a non-union job. Possibly back breaking work. No investment in their future. Just cogs in the wheel which are completely fungible (broke your back? File a claim with insurance. Fuck off. Deal with it. Not our problem. Then hire the next sucker to replace you. Rinse and repeat)
Don't know of many waterways that are solely in one state so the EPA automatically has jurisdiction as well.
What is it that you are purposing? That companies don't go to states with low cost of living?
The idea that "it's KY" is bigoted. They are people, just like anyone else. We don't tolerate it when others are dismissive of people based on their race and we should not be tolerant of the attitude based on where they live either.
Now you might say they will just leave the US and manufacture elsewhere. Well thats where tariffs come in and the UAW is a core voting block so they will have to alter any plans to move to Mexico. Higher inflation will be the result but its probably worth it long term.
No one at these Toyota facilities has an appetite for that. The benefits package and overall lifestyle for a TMMK worker is quite nice compared to the average person in the Lexington metro and the jobs are competitive.
Perhaps ironically, when I was in school, the biggest issue was finding engineers that would accept the pay which was generally lower than guys on the floor.
Sorry, but to be frank, you just don't know what you're talking about.
I did a co-op at TMMK in Georgetown, KY many moons ago and it was a short drive from Lexington where I was studying for my mech engineering degree at UK. It is a massive university with a solid engineering school, for the uninitiated. The metro also has an excellent network of technical colleges and during my various other stints over those years, I was always impressed with the quality of the workforce on the factory floors.
As someone born in the coalfields of Appalachia, I'll admit that the ignorant hillbilly stereotype has some merit, but that's two hours of interstate driving east of where this is happening and the cultures have almost nothing in common. Hill people don't really leave the hills and Lexington is quite the "big city" for where I come from, full of hifalutin Whole Foods shoppers. I think the series "Justified" does a good job of describing this phenomenon.
There is a lot more I could address about your thoughts on labor and poverty, but it's hard to move past your premise and I don't have time to write a treatise... but JD Vance did and it's pretty good.
