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Arizona could become an electric vehicle manufacturing hub

May 9, 2021 GMT

PHOENIX (AP) — Can Lucid, Nikola and ElectraMeccanica turn Arizona into a major electric vehicle manufacturing hub?

“We have the potential to become a massive global leader in emerging auto manufacturing,” Chris Camacho, president and CEO of the Greater Phoenix Economic Council, told The Arizona Republic.

It’s happened before.

Nearly 40 years ago, the first Nissans rolled off an assembly line in Tennessee, helping to turn a largely rural state with modest manufacturing aspirations into an automotive powerhouse.

Tennessee now produces more than 800,000 cars and trucks annually and employs around 123,000 people, with three major auto brands and more than 900 parts suppliers.

The Republic reports that Arizona has commitments from three auto manufacturers and has made significant headway over the past three years.

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But unlike the three major manufacturers in Tennessee — Nissan, General Motors and Volkswagen — Arizona’s three vehicle producers are all startups, and they’re all engaged in electric-vehicles.

Lucid has announced its Casa Grande factory is complete and will begin producing tens of thousands of electric cars this spring.

Nikola Corp. is building a factory in nearby Coolidge where it will produce electric and hydrogen powered heavy trucks.

ElectraMeccanica will start assembling three-wheeled, one-seat electric cars not much bigger than motorcycles at a plant near Phoenix-Mesa Gateway Airport.

The next big question is whether all the companies can get commercial production up and running.

After that, the big test will involve suppliers and whether Arizona can attract them in sizable numbers to transform the state into an auto manufacturing hub.

If Arizona follows in the footsteps of Tennessee and other auto-rich states, a familiar pattern could develop.

“You’ll see a whole bunch of different types of suppliers locate next to a plant,” said Dale Rogers, a supply-chain professor at Arizona State University who has tracked similar patterns in his native Michigan and in Nevada, where Tesla built a huge battery plant.

“These economic clusters typically grow up organically over time as there’s demand,” Rogers added.

UACJ Automotive Whitehall Industries, a maker of aluminum bumper assemblies, sunroof guide rails and battery housings, announced in March that it would convert a Walgreens distribution facility in Flagstaff into an auto-parts factory.

The company, which expects to bring 350 jobs to northern Arizona within five years, specifically cited the need to be close to electric vehicle customers.

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Another company, Jomi Engineering Group of Canada, has purchased a building in central Casa Grande. Jomi is an engineering services and manufacturing processes entity rather than a parts supplier.

“We’re trying to court these other businesses,” said Casa Grande Mayor Craig McFarland, who anticipates more announcements over the next six months. “Between Nikola and Lucid, we think we can make this into a tech corridor.”

The next few years could prove pivotal.

Camacho said his GPEC his group already is in touch with various auto-parts companies, though he didn’t disclose names.

“There are dozens of companies in engineering and emerging automotive suppliers evaluating us at the moment,” he said, adding that more announcements of suppliers landing in Arizona will come over the next year or so.