By Crain’s Editorial Board
By Crain’s Editorial BoardGov. J.B. Pritzker is right to do all he can to promote Illinois as a hub of electric vehicle manufacturing. He’s doing just that with a new and massive incentive package that Crain’s Greg Hinz reckons may be the largest ever offered in the state’s history. Included are a wide range of tax breaks, from payroll credits and exemptions from utility and some sales taxes, to assistance with job training and favored treatment in obtaining government permits and road construction funds.
As Crain’s has noted many times before, the state is well positioned to be a leader in development of the technology that underpins so much of what promises to be the next generation of on-road transportation in the United States and the world: electric-powered cars and trucks, smart highways and self-driving vehicles.
The state’s most notable entry in this category is Rivian. At the company’s sole manufacturing plant in downstate Normal, electric pickup trucks are now rolling off the assembly line and being sold throughout the U.S., even as the company moves forward with plans to produce 100,000 electric delivery trucks to one of its key financial backers, Amazon.
Earlier this year, New York-based hydrogen vehicle maker Hyzon Motors said it will begin producing fuel cell components in Bolingbrook at what promises to be the largest plant of its kind in the U.S. Lion Electric, a Canadian maker of electric-powered school buses, plans a manufacturing plant in Joliet that will employ 800 people.
Meanwhile, Here Technologies, the digital mapping company that used to be known as Navteq, is developing GPS-enabled navigation devices with partners like BMW to make driverless cars a reality. And Argonne National Laboratory and the University of Illinois at Urbana-Champaign’s engineering school are working together on fuel cell development. Also, global delivery giant DHL is operating an innovation center here—one of just three worldwide—to explore how artificial intelligence can reshape the business of moving goods around.
So Illinois already has natural advantages in the race for 21st-century transportation investment. But, with Rivian eyeing Texas, not Illinois, for its second manufacturing plant, and with Ford Motor recently announcing billions of dollars of electric-vehicle assembly investment in Tennessee and Kentucky—not at the Detroit giant’s existing megafacility on Chicago’s Far South Side—warning signs are flashing that Illinois must do more to keep its edge in this rapidly growing field.
That’s why Pritzker must act swiftly to tout Illinois’ know-how now, while automotive giants like Ford and its rivals are pondering where to make these multibillion-dollar investments, decisions that will have major economic ripple effects for decades. And a smart centerpiece of Pritzker’s plan is to shore up the state’s existing automotive assembly centers—the Ford plant along Torrence Avenue and Stellantis’ similar facility at Belvidere just outside Rockford—to entice their owners to convert these factories to electric-vehicle production hubs of the future.
To pull that off, Pritzker’s plan offers a refundable state income tax credit of 75% or 100% of withholding from workers at electric manufacturing and supply plants, for up to 15 years. As Crain’s first explained, the larger, 100% figure would apply to newly hired workers at a facility located in an “underserved area” of the state. Belvidere, the South Side Ford plant, and Normal, Crain’s Hinz notes, would all qualify for that “underserved” designation.
Another focus of the legislation is luring Samsung, which is currently weighing bids from Illinois and Ohio to build an enormous battery factory that officials here want to land across the road from Rivian. That facility could employ as many as 7,500 people.
Automotive production has for decades been a pillar of the Midwest economy, even in Illinois, which may not boast as many assembly plants as other states, but which is home to a vast army of parts makers and suppliers. Shepherding these metal-benders toward the industry’s electric-powered future is a key economic development challenge for Illinois. One glance through the pages of Crain’s sister publication, Automotive News, the industry bible, confirms it: Headline after headline focuses on EV development. So Team Pritzker is correct to encourage a retooling of our existing manufacturing infrastructure, while also demonstrating to companies like Samsung that Illinois is the right place to invest.
What would be even better would be to address the other, more fundamental issues that have tended to make Illinois less attractive than other states: Our pension-weakened state finances and our well-earned reputation for political corruption, just for starters. That’s the long game. But in the meantime, if incentives can help us overcome those demerits, then the Legislature should get behind this plan