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- Jun 16, 2020
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A leading global battery cell technology company announced Thursday it would open a massive manufacturing facility in Arizona's southwest Valley, billing it as the first lithium-ion battery plant owned by a U.S. company in the nation.
The Idaho-based KORE Power will open a 1 million-square-foot "KOREPlex" facility 40 miles west of Phoenix in Buckeye and hire 3,000 full-time employees with salaries at or above the area median salary, the company said.
The area median income in Maricopa County was $51,000 in 2020, according to the state Housing Department.
Gov. Doug Ducey praised the announcement in a statement from KORE Power. “Not only will this facility create thousands of new jobs, it will position Arizona as an anchor in the global battery manufacturing supply chain."
KORE Power contends the facility will "strengthen U.S. energy security by creating a new domestic battery supply."
Buckeye Mayor Eric Orsborn said in a statement that the facility was a win for Arizona and city residents who will benefit from "significant employment opportunities."
The plant would open in spring 2023, with construction slated to begin by the end of the year.
The plant, which KORE Power says will operate with net-zero carbon emissions, will produce lithium-ion battery cells commonly used in electric vehicles, power grids and smartphones. Its annual energy production could produce enough power for 3.2 million homes, the company said.
The global race for lithium-ion
Announcement of the Buckeye facility comes amid a broader national effort to enter and compete in the race for lithium-ion battery production, which U.S. leaders say affects everything from consumer electronics to national defense.
In June, the U.S. Department of Energy announced new policies to "scale up a domestic manufacturing supply chain for advanced battery materials and technologies."
The agency's policies will require projects related to advanced batteries that receive federal support to "substantially manufacture" those products in the U.S.
The agency also announced it would begin providing loans to vehicle battery cell manufacturers as parts of its $17 billion loan program.
Secretary of Energy Jennifer Granholm said production of the batteries is "critical" to the country's clean-energy goals and that the effort will "enable electrification of the transportation sector."
Production of the batteries also will help store renewable energy used to decarbonize the power grid — a goal President Joe Biden has repeatedly expressed.
Biden signed an executive order in February to facilitate more resilient supply chains, "greater domestic production ... and a world-class American manufacturing base and workforce."
The U.S. currently lags China, Japan, South Korea and Germany when it comes to lithium-ion battery cell production.
The U.S. has only four such battery plants, compared with China's 93, the Washington Post reported in February, according to data provider Benchmark Minerals.
Losing market share of the lithium-ion battery cell production not only jeopardizes the country's clean-energy economy, leaving the U.S. dependent on other supplies, but also means American workers could stand to lose out on a potential job boom.
Why KORE Power chose Arizona
Arizona beat out two other contenders for the facility, Florida and Texas.
In May, KORE Power said it was evaluating all three sites and conducting a "quantitative monetary analysis."
KORE Power could potentially see $65 million in benefits from Arizona.
The majority of the benefits, a $63 million tax cut, would come through state's Qualified Facility Tax Credit program, Arizona Commerce Authority spokesperson Alyssa Tufts told The Republic.
The refundable tax credit, first passed by the State Legislature in 2012, aims to attract manufactures to the state, according to the Arizona Commerce Authority website.
To qualify for the program, companies must:
- Invest at least $250,000 in building or expanding a facility.
- Create new full-time positions and pay 51% of the employees at least 125% of the state's annual median production wage in urban areas and 100% in rural area.
- Post at least 65% of the project’s sales/revenues from outside of Arizona.
- Pay at least 65% of health premiums for its "net new full-time employees.
The program is capped at offering $70 million in tax cuts per year.
KORE Power also could receive a $2 million grant from the Arizona Competes Fund, which aims "to promote the growth and diversification of business investment in Arizona by attracting, expanding and retaining businesses in targeted industries," Tufts said.
"The final amount would be dependent on any applications received from the company," she added.
Company spokesperson Aleysha Newton said KORE Power worked with officials from Arizona Commerce Authority and Buckeye for two years solidifying the deal.
Buckeye officials would not provide details on any city-offered incentives, saying only that KORE Power had requested an expedited review process and city assistance in building public infrastructure.
City spokesperson Annie DeChance said KORE Power might not need a development agreement to built its facility, and that the city would make a determination based on what the company asks for.
KORE Power will spell that out in various planning documents to be submitted in the next few months, DeChance said.
Mayor Orsborn said the city was looking forward to expediting what it could to bring the plant to market as soon as possible.
According to a statement from the company, "The Arizona site offered proximity to complimentary industries such as e-mobility, solar, semiconductor, and utilities, workforce and logistics capacity, and a pro-business tax and regulatory environment."
Company CEO Lindsay Gorrill said Arizona's growing reputation as a green technology area and its highly educated workforce made the state "a home run."
Nearly 33% of people in Maricopa County have a bachelor's degree or higher, according to the U.S. Census. The figure is about 20% for people in Buckeye.
Ducey told reporters Thursday the announcement was one more example of the "world's more advanced manufacturers in competitive situations choosing Arizona."
Arizona has seen an influx of technology companies in the past two years.
- Computer chip giant Intel plans to add two factories to its massive Chandler campus.
- Taiwan Semiconductor plans to open a facility in north Phoenix.
- Computer hardware company CP Technologies is coming to Prescott.
- Battery recycling company Li-Cycle is opening its third state facility.
- Electric vehicle manufacturer ElectraMeccanica plans to open in Mesa.
Orsborn said that's great news for Buckeye's workforce, 90% of whom leave the city and head east for work everyday, he added.
KORE Power said the plant will be located at the northeast corner of State Route 85 and Maricopa County Route 85.
Water usage at the facility
Water usage at the battery facility would be minimal, Gorrill and Orsborn told The Republic Thursday. Site plans should offer details on that once submitted.
Buckeye, the second fastest growing city in the U.S. according to the U.S. Census, has long struggled to acquire an adequate water supply to keep up with its booming population.
Ducey quashed concerns, saying more water innovation was needed but that "for today and the foreseeable future, Arizona is in an ideal position in which to grow."