Southern Arizona is establishing itself as a battery capital in the United States as battery manufacturing companies continue to select the region to be home to their operations. Through incentives, the City of Tucson is attracting manufactures that will boost economic growth and provide clean energy to the city.
Both Sion Power Corporation and American Battery Factory announced major moves in Southern Arizona in late 2022 with help of the City of Tucson Primary Jobs Incentive, which provides up to a 100% reimbursement of construction sales tax to qualifying expenses such as required public infrastructure improvements, offsets to impact fees and job training.
On Dec. 6, 2022, American Battery Factory announced that the company had selected Tucson to be home to their official headquarters and first-battery cell gigafactory. The 2 million-square-foot site, located across 267 acres in Pima County’s renowned Aerospace Research Campus, will be the largest gigafactory for the production of lithium iron phosphate (LFP) in the United States.
American Battery Factory had criteria for a successful gigafactory site, and Tucson met their needs with clean, scaled and available energy; a skilled workforce and high-quality education institutions; and available land and supply chain materials, according to Sun Corridor Inc. CEO and President Joe Snell.
The site will provide $1.2 billion in capital investment,$3.1 billion in economic impact and increase the growth of a clean energy economy across the country. During the first phase of opening 300 high-paying jobs will be created, scaling up to 1,000 cumulative jobs, according to Tucson’s Economic Initiatives Director Barbra Coffee.
Job positions include operations, production, scientific and technology jobs, automation and robotics, as well as executive and headquarter positions. “Going from 300 jobs in phase one to 1,000 jobs that build out, there is a lot of investment in physical infrastructure,” Coffee says.
Battery manufacturing boost clean energy
In 2020, the City of Tucson declared a “climate emergency” and committed the city to achieving carbon neutrality by 2030. Since then, the city has provided strategies that adapt to the impacts of climate change and has integrated businesses that align with the city’s mission.
“We’ve been oriented around renewable industries as one of our target industries in our comprehensive economic development strategy and attracting companies that can help us grow and develop creating a sustainable future,” Coffee says.
American Battery Factory’s LFP battery cell chemistry allows for the production of the safest, longest-lasting and most eco-friendly batteries currently available. The company’s materials are more ethically sourced and last more than double the average performance of other batteries.
“This marquee American Battery Factory project catapults Tucson into the national spotlight, ensuring this region has a prominent place in the energy storage and EV manufacturing supply chain being developed right here. With key advancements from ABF, Tucson will be a cutting-edge leader ushering in new EV technology and improved energy storage efficiency,” Snell says.
On Dec. 7, 2022, local Tucson company Sion Power Corporation, a technology developer of next-generation electric vehicles (EV), announced plans to expand their battery manufacturing operations in Tucson.
The overall economic impact of the Sion’s expansion is $341 million over the next five years. The 111,400-square-foot expansion site is expected to be completed by 2026 and create over 150 jobs. Job positions include engineering, skilled technicians and other manufacturing-related positions, according to Coffee.
Sion chose to expand and stay in Tucson because of the city’s rich history and availability of skilled Tucson employees. “We’re thrilled to see this expansion include innovative and next-gen technologies that offer high-skilled jobs to our community,” Snell says.
Not only will American Battery Factory’s and Sion Power’s projects result in billions of dollars in economic impact, but the projects also represent the importance of headquarters operations in a community.
“Headquartered companies become deeply ingrained into the fabric of the community where they are located, with a higher tendency to purchase goods and services locally, among many other positive ripple effects and impacts,” Snell says.
Skilled workforce fueled by education
While incentives, land availability and dry climate helped to bring American Battery Factory to Tucson and allowed for Sion Power’s expansion, Tucson’s available-skilled workforce made the city stand out to these two developers.
Tucson’s skilled workforce can be accredited to the city’s emphasis on higher-level education to boost economic growth, with Pima Community College and the University of Arizona located in the city.
Pima Community College developed the school’s Centers of Excellence to provide high-tech training and reskilling of workers. The Centers of Excellence were built on the foundation of listening to the needs of industry partnerships to boost economic growth in the region, according to Pima Community College’s Vice Chancellor of Workforce Development and Innovation Ian Roark.
“Our approach to workforce development is that it’s our role as the community’s college to meet the workforce development needs of employers here and now in our community,” Roark says.
PCC’s Center of Excellence in Applied Technology was something that caught the attention of American Battery Factory. The center’s Advanced Manufacturing Building, opening this spring, runs 100,000 square feet over three stories and will feature a makerspace, advanced manufacturing incubator and the Flexible Industry Training (FIT) Lab. All of these spaces are designed for innovation and manufacturing to flourish, according to Roark.
“We wanted that in there so that our students could not only learn how to be the workers in these programs and industries, but they can also see themselves as the entrepreneur in advanced manufacturing and therefore bring about the next generation of innovation and technology in this space to keep that business growth in our community,” Roark concludes.