Plug-in electric vehicle (PEV) sales have grown spectacularly over the past decade. Continued growth seems certain, especially as the federal government offers generous subsidies for consumer PEV purchases with a goal of having these vehicles account for half of U.S. auto sales by 2030. The federal government is also subsidizing the development of a U.S. PEV battery supply chain. Industry has responded by planning to expand North American battery plant capacity by 370% by 2025, according to Argonne National Laboratory/U.S. Department of Energy. 

The map below uses data from NAATBatt International to depict the emergence of a Battery Belt stretching from Detroit down to Atlanta.

There are several reasons for the Battery Belt’s emergence. First, EV batteries are extremely heavy and expensive to ship, and thus best located near auto assembly plants or railways for shipment. Second, the low electricity costs in many Battery Belt states, especially in the Southeast, is vital to converting raw materials like graphite and lithium into battery cells. Finally, the Battery Belt largely consists of states with above-average manufacturing employment growth over the past 10 years.

Note that battery pack manufacturing (purple markers) is clustered from Michigan down into the Carolinas, while battery pack assembly and recycling (red markers) is located nationwide but again heavily concentrated in the Southeast and Midwest. Producing high-value batteries also requires a lot of R&D support and specialized machinery (green markers), which stands to benefit high-tech hubs like San Francisco and Boston as well as Detroit, which is a major center for mobility R&D. 

The rise of EVs matters because it stimulates demand for manufacturing and logistics real estate. Tennessee, Kentucky and Georgia, the buckle of the Battery Belt, are positioned to benefit, as will some Midwestern areas, particularly in Michigan. Traditional tech hubs may also see an uptick in lab and office space demand.