EI2 Asks: EV Manufacturing Trends in Georgia

The Georgia Manufacturing Extension Partnership (GaMEP), a program of Georgia Tech’s Enterprise Innovation Institute, works with companies in manufacturing to increase their competitiveness through technical assistance and training. In addition to being an associate director, senior project manager, and the group manager for strategy, leadership, and technology at GaMEP, Mike Stonecipher also chairs the Atlanta chapter of the Society of Automotive Engineers (SAE), which covers Alabama and Georgia. Stonecipher has been following the evolution of the electric vehicle (EV) industry in Georgia, and below he shares some trends he’s observed.

A photo of a man, Mike Stonecipher.
Mike Stonecipher, group manager for strategy, leadership, and technology at GaMEP

Can you give us an overview of automotive manufacturing nationwide?
This year, the automotive industry is on track for about 16 million vehicles in production, and about 8.4% of those are electric vehicles.

When we speak of electric vehicles, you generally hear the term BEV, for battery electric vehicle, and there’s hybrids, such as PHEV, or plug-in hybrid electric vehicle and HEV. About a year and a half ago, EV numbers broke through the 5% mark, so there was a pretty good growth curve with early adopters. Even though it’s still at 8-plus percent, sales have slowed down, and inventories are growing.

Which category of battery has emerged as the leader?
This year it looks like hybrids are outselling the battery electric vehicles, and there’s a perception that these vehicles can serve as a technology bridge until we get the necessary infrastructure in place. There are a lot of players in this field. We don’t hear about all of them in the States, but China’s really making strong inroads on electric vehicles. BYD Auto is probably one of the global leaders, as is Tesla.

EVs represent a heavy capital investment in terms of design and manufacturing. Tesla wasn’t profitable in this until they started producing around 50,000 units per quarter. For a lot of startups, that’s a pretty big hill to climb. But then you have existing original equipment manufacturers with healthy bank accounts that can put millions and millions of dollars into manufacturing, stay with it, and get to the other side.

What are the numbers like in Georgia?
That 16 million represents everything in the U.S. — predominantly internal combustion engines (I think pre-COVID, it might have been more like 17 to 18 million). But the Southeast typically represents about 1/3 of that number, or maybe more.

So, the industry is growing, but the sales are not supporting the rate in which we’re manufacturing electric vehicles currently. Is that disproportionately affecting smaller startup companies that don’t have the money behind them?
Right. With the inventory growth, the larger producers are now looking at price concessions, which used to be kind of a side note. Tesla was categorized as a luxury vehicle, and that designation was really based on technology more than luxury. When they started to reduce the pricing, they were reclassed to more of a mid-range to increase sales.

Do you think EV manufacturing is going to slow in Georgia?
Well, it’s moving forward, but overall, many manufacturers have pivoted to not be 100% EV. They’re going to do more hybrids. The EV market is slowing down, and hybrids — both plugin and a non-plugin version — seem to be what consumers are moving toward.

Is that because of a fear of not being able to find places to charge EVs?
Yes. It’s what we call range anxiety. Even though the charging infrastructure has grown, the problem is that many of the charging stations typically have 25% of their chargers in disrepair and not functioning, and there’s not a lot of infrastructure support to maintain those systems. Lots of businesses have chargers, but these companies aren’t like your typical gas station, which have to make sure the pumps function. Instead, you’ve got charging stations that are not completely tied to an on-site support system.

Are there companies that will benefit from the new EV plants moving in? And, if so, will it be because they’re EV or will they benefit from just having more automotive companies in Georgia?
Yes, and yes. Take, for example, the Hyundai facility near Savannah; there’s a 7 to 8 job multiplier for each job in that facility. It’s not just adding jobs in the local supply chain to support the manufacturing. It’s also the housing, the restaurants, and the schools. The benefits are directly related to the product and indirectly related to the growth of that. When you have to bring on 5,000 to 6,000 people, that’s pretty big — bigger than most towns in Georgia.

What does that mean for manufacturing companies? It sounds like if you’re in an area that does have huge job growth, you’re going to have to work harder to keep your employees.
That’s right. You’ve got to be competitive and liked.

How can a company become an employer of choice?
Employees currently have choices and will choose an organization that meets their needs and aligns with their values. Although competitive wages are nice, equally important is the culture and work environment.  Companies that are mission-driven and have strong HR systems, as well as modern and safe working conditions, tend to attract and retain top talent. Leadership and team development is also critical to building a committed work culture.

One way to help with recruiting is to think outside the box. So rather than just looking at traditional hiring practices, you’re engaging with programs like Second Chance, Work Based Learning, and apprenticeships, while also investing in your relationships with high schools, technical colleges, and universities in your region.

Then, to get employees off to a good start, you want to be sure you’re keeping the lines of communication open. That’s not just a matter setting your expectations clearly, for example, but also being open to feedback from employees from day one onward, through things like counseling, mentorship, and surveys.

And a lot of people forget that staffing isn’t a one-and-done kind of thing. You’ve got to think longer-term, to have professional development plans for everyone on your team, not just the executives and so on. It’s really about creating a workplace where people feel valued — a culture they want to be a part of.

How is EV manufacturing different than internal combustion engine manufacturing?
Compared to combustion engines, there are about 30% to 40% fewer components in electric vehicles. Also, we’ve added weight to vehicles and trucks, because the batteries are heavy. So, we try to make it up in lightweight materials and low-friction materials.

I was talking to a friend who rented an EV and had a flat tire and had to call for help. I was like, “Just put the spare on.” Well, there’s no spare. Why? It adds weight. “Well, just plug the tire.” But you can’t plug the tire. Why? Because they’re low-friction tires, to make up for the heavy weight of the battery and the drivetrain.

So, he had to call for help. Those are little things that you don’t think about.

EV vehicles are probably more closely related to electronics now than they might be automotive. Outside of the battery, the electronics are probably the third biggest in cost. Two things are kind of coming together at one time. One is connected vehicles, meaning they are talking to other cars, talking to map systems, talking to buildings, and so everything’s connected, and that’s requiring a lot of electronic power. The second is autonomous vehicles, EV’s self-driving connected vehicles. It’s redefining things.

What are some of the challenges to be overcome?
For the suppliers, one is the variation in EV demand and EV adoption. That uncertainty has put additional burden on the suppliers to strategically meet the needs of the EV manufacturers and not go broke in the process.

There’s an interesting phenomenon going on right now where suppliers are trying to pivot and retool for EV components while maintaining what we call ICE (internal combustion engine) components. Because of that, suppliers have been hit with inefficiencies, because now they’re trying to bring up a new process while supporting the old, and the conversion is kind of in between.

Some of the bigger suppliers, like BorgWarner, Bosch, and Magna are big enough they can retool and afford to do it and weather the storms. So, they’re in the lead. But for some of the smaller suppliers it’s tough, and it’s even tougher for startups. If you’re manufacturing door handles, and each vehicle on average has four door handles, and you’re making 300,000 of them or variant thereof, you get economy of scale.

But then a startup comes in and says, “Well, this year we might sell 15,000 vehicles,” and it becomes more of a custom order, which is harder to manufacture and harder to make profit on. It’s harder on the startup, and it’s harder on the supplier.

Then there’s the financial burden of converting, and the workforce transition and skills gap. For example, a large segment of the workforce is experienced with drivetrain production. There are transmission manufacturers, engine manufacturers, machine shops, and now it’s automated battery assembly lines and electric motors and electronics. It’s a pretty big shift.

Changing and new regulations add complexity and can be a factor to supply chain disruptions. Limited availability of scarce resources, such as cobalt, rare-earth magnets, lithium, etc., is a challenge to source and maintain a predictable and steady supply.

Are there opportunities for a particular type of company to benefit from meeting the challenges that others might have?
The ones who are most likely to benefit are those companies that are in the electronics side, those that are in the control side, chip side, circuit side — as well those that are already in similar products and processes, such as body stamping and interior.

For wheel manufacturers, it could be an easy conversion. Tire manufacturer is a bit of a different design. Batteries have power management controls, power distribution, drivetrain architecture. Those things are significantly different, and they’re making rapid advances.

Just a side note: the EV batteries are really big right now, partly because of the insulation between the cells and partly because the battery is thicker due to the risk of fire. But if they can reduce that risk of fire — and one way of doing it is by going solid state — they could reduce the battery footprint and increase the power output.

What are some of the other technologies automotive manufacturers are considering?
There’s bidirectional charging, where you can feed the power from the EV back to your house. You can charge when the electricity rates are low and pull power from that vehicle when the rates are high. Bidirectional charging is starting to become more popular, but it’s super expensive right now to invest in the electronics to move that energy back and forth.

There’s a big push in Georgia to support the advancement of hydrogen fuel cells for heavy vehicles. Hydrogen power is green energy, especially if it’s produced through nuclear power. Right now, that qualifies as a green energy producer, and so with the nuclear power facility in Savannah — and with Hyundai and the international shipping infrastructure — there’s a good potential for the Southeast to be one of the leaders in hydrogen fuel cells.

How are U.S. economic incentives affecting EV manufacturing?
There’s a 100% tariff going into effect on Aug. 1, 2024, for Chinese EV imports. Now China must figure out where can they produce EVs and sell to the United States. They are investing heavily in facilities in Mexico.

For the consumer to get the full EV subsidy or tax break, the battery and the components must be sourced in the U.S., and if they are sourced outside but assembled in U.S., they can get a partial tax credit. That’s partly why Hyundai got ahead of the curve, building the plant near Savannah.

And we don’t know what the policies of the future will hold. I do think, regardless, that hybrids have a pretty good future and as technology improves, demand for BEVs improves. To avoid buying a soon-to-be-obsolete BEV due to a breakthrough in technology, such as solid state battery, many folks lease an EV.

If you are an automotive manufacturer interested in learning more about the services GaMEP can provide to help you stay competitive in the global market, please reach out to Mike or your region manager for more information.

EI2 Asks: A Primer on Placemaking

The Center for Economic Development Research (CEDR), a program of Georgia Tech’s Enterprise Innovation Institute, provides communities with the data and guidance they need to make smart economic development decisions. Alan Durham is a senior research faculty manager and the International Economic Development Council’s (IEDC) economic development course director at CEDR, and below he outlines some basics of a crucial – and often overlooked – element of economic development: placemaking.

A photograph of a man, Alan Durham
Alan Durham, a senior research faculty manager and the International Economic Development Council’s (IEDC) economic development course director at CEDR.

What is placemaking?
I’m going to start by giving an example of what placemaking isn’t. So, after World War II and the birth of suburbia, development in the United States became very generic, very homogenized, very cookie-cutter, and that has continued through today. If you drive I-75 to Florida, every exit ramp looks exactly the same, with the same fast-food chains, drug stores, grocery stores, and it’s the same in Georgia or Florida, Mississippi or Colorado.

Think about the old Dixie Highway before the Interstate system was built. That was a four-lane divided highway that everyone took to get to Florida, and there was a lot of character – you’d see, for example, local restaurants shaped like coffee pots. We call that roadside architecture. Think about Route 66 and all the crazy motels that looked like teepees. Some of the old Arby’s chain restaurants used to be shaped like cowboy hats. These things were interesting. They were unlike anywhere else. Our Interstate exits could be anywhere, and placemaking is about creating someplace unique.

What characteristics make a particular place appealing?
The heart of their history, and the heart of their character, is usually their historic downtown area, most of which were built in the 1890s through about 1920. That’s where you can find your local mom-and-pop restaurants, your local coffee shop, your pizza parlor that is not a chain. These places are unique, the architecture’s regionally unique – often tied to locally available materials – and your communities differ depending on who the local rich person was and what kind of buildings they wanted to build. You can look at different downtowns and feel like you’re actually somewhere, not just anywhere.

How is placemaking different from the common conception of economic development?
The traditional idea of economic development is business recruitment, retention, and expansion, and communities have been doing economic development through that lens for decades. But we have found that younger generations, especially millennials and Generation Z, don’t move to an area for a job. They move to an area because it’s where they want to live, and once they’re there, they look for a job.

We still do business recruitment, retention, and expansion, but we’re also starting to pay a lot more attention to placemaking to try to attract the younger generation of workers, and the key to attracting them is building a place where people want to live and businesses want to be. That’s my economic development focus: How can I help communities become extraordinary places that stand out from every other place in America? What unique assets make your community a special place that people want to live in?

What are some of the elements that younger generations prioritize?
Number one is the built environment. Historic buildings have a lot more character than a strip mall, so I help communities redevelop their historic downtowns. A lot of those areas are sitting there vacant and boarded up, and people really want that unique coffee shop with wood floors and huge windows. It’s not the same as a Starbucks drive-through.

Number two, it has to be walkable. People are tired of sitting in traffic and filling up their tank with expensive gas. They want to be able to walk somewhere, to bike somewhere – to walk downtown and have dinner at a pizza parlor, walk next door to an ice cream shop, and then afterward have a beer and see a live band.

To facilitate this, town centers need to introduce more residential buildings in walking distance to commercial offerings. The idea of keeping restaurants and retail on the ground floor but converting some of the vacant upper space to residential lofts is coming back in favor, because if you live in downtown, you’re likely to patronize those businesses. Retail follows rooftops.

Do you ever encounter pushback to the principles of placemaking?
You sometimes run into opposition against apartments and rental units. In all fairness, a lot of communities already have too much rental and they need to explore ways to encourage home ownership, and that could be addressed with new development, but rental is always going to be a part of a community. You want to make sure it’s kept in balance.

The second concern tends to be traffic. The worry is, “You can’t put all these residents in your downtown because you’re going to clog up the street with traffic.” But that’s not the case, because if you live downtown, you’re going to walk a block away to get your lunch. So you’re actually reducing traffic by increasing density in and around your historic downtown and central business district.

The best way that I have found to counter some of these false narratives is to show people what other communities have done. “Look – this community is successful and thriving and exciting. They’re attracting young people. This is the workforce of tomorrow. They want to live in this location – and, look, traffic isn’t a problem here.” If you build a place for cars, you’re going to get cars. If you build a place for pedestrians, you’re going to get people on foot.

What types of questions should communities who want to increase their desirability be asking themselves?
Whenever you do new construction in a historic neighborhood, you have to have design guidelines in place to make sure that the new construction is compatible with and complements the existing historic buildings. I’ve seen communities build an apartment complex that looks nothing like any of their historic brick buildings. Instead of becoming a part of their downtown, it’s now an eyesore. They might have gotten the location correct, but instead of creating a place by picking up some of the elements of the historic buildings, they end up missing the mark and destroying the character of their downtown.

So design guidelines are extremely important, and communities need to ensure that developers are building an asset to their community that will continue to contribute to its character for the next 50 years.

What kind of guidance can CEDR offer those communities?
If half your downtown is vacant and boarded up, it’s hard to know where to start. CEDR can go into these historic central business districts and give a community a road map. We show them what they could be versus what they are today, and we can give them step-by-step instructions to help them get from point A to point B.

That involves everything from architectural design to financing building restoration, identifying parking needs, helping them activate festivals, and creating downtown park space to hold small concerts. Every historic downtown is unique, so we go in and work with the community to help them make sure their historic downtown is an asset that attracts people and businesses.

What trends is CEDR noticing in Georgia?
One of the things that we have seen post COVID-19 is people who can work remotely are moving out of inner cities, and they’re not stopping at the suburbs. They’re going to exurbs and small towns, where property is cheaper and crime is less – and the communities that have already done an excellent job bringing back life into their historic downtowns are going to be the winners here. Placemaking helps set these communities aside as somewhere special with unique characteristics that are going to draw residents.

CEDR is hosting its annual Basic Economic Development Course (BEDC) August 26-29 in Atlanta. Can you give us a brief overview of that program?
The BEDC is the longest running basic economic development course in the nation; this is the 57th year that it’s been offered by Georgia Tech. They partner with IEDC, the International Economic Development Council, to put on this four-day course, which covers a wide variety of economic development subjects, from real estate redevelopment to business recruitment. We do marketing and promotion. We do ethics in finance. The people who take the course are usually new to the economic development industry, and the BEDC gives them a very deep and thorough overview of what to expect in their economic development careers.

Every year I’ve taught it, the BEDC has been about placemaking, creating a place where people want to live and businesses want to be. Right now, too many people live where they do because they have to, not because they want to. Smaller communities should look around and figure out what makes them special, because they need to capitalize on their unique assets if they’re going to be a population winner in the future.

Register for the 57th annual BEDC here.

EI2 Asks: Jenny Houlroyd, DrPH, Discusses Silicosis and Engineered Stone Manufacturing

Jenny Houlroyd is the Occupational Health group manager of the Safety, Health, and Environmental Services (SHES) program, which is part of Georgia Tech’s Enterprise Innovation Institute. On May 16, 2024, she gave a presentation at the conference Preventing Silicosis – An Ancient Disease in Modern Times: Silicosis Caused by Artificial Stone in the U.S., hosted by the Center for Occupational and Environmental Health at the University of California, Los Angeles. As June is National Safety Month, Houlroyd, a national expert on the disease, discusses the prevalence of silicosis in the manufacturing of engineered stone and explains why keeping workers safe is essential to growing Georgia’s economy.

Jenny Houlroyd, CIH, MSPH. DrPH

Why is manufactured stone more hazardous to work with than natural stone?

A natural stone slab typically has a concentration of silica that’s 40% or less. It’s comprised of lots of different minerals. Engineered stone or quartz countertops can be 90% — and reaching towards 100% — silica. They take silica, crush it, mix it with polyester resins and other minerals, and then compress it under either high heat or pressure to make the slabs.

When the slabs get to the fabricator, the workers at these countertop fabrication shops have to cut or grind on it a second time, making some of dust produced into nano-sized particles. Not only does it become nano-sized, but it becomes charged and reactive, and there is a growing body of research these demonstrates this dust causes more inflammation in the lungs when compared to a natural stone slab. There’s some interaction, and they’re not quite sure what it is yet, but they think it’s a combination of the polyester resins, the nano-sized silica particles, and the other minerals present that’s leading to this aggressive development of silicosis. So, it’s very different than a natural stone slab.

You recently completed your doctorate in public health (DrPH). What was the focus of your dissertation?

I did my dissertation on respirators because they are the last line of defense for a lot of workers. If we don’t get that right, then we’re going to have workers at high risk of being exposed to inhalation hazards on the job.

How does that tie into your work around silicosis?

I have been with SHES since 2005, and over the course of the 18 years I have been going to stone fabrication shops. I have watched these stone fabrication shops go from being able to control the exposure to silica when fabricating countertops with the use of wet methods to now, when fabricating engineered stone slabs, needing to upgrade their employees’ respiratory protection to a powered air purifying respirator. I would classify engineered stone as a really toxic product. When you have something that’s high-risk, you have to prepare for any of those systems to fail and have backup measures. However, now we are asking employers to purchase not only additional equipment to control the dust exposure, but we are also asking them to invest in these expensive respiratory protection devices. The stakes are very high if these respirators are not the right size, fitted properly, and the employees understand how to clean and store the respirators.

When I go out to these shops, most of the workers in this industry are relying on respirators as their primary source of protection, and they need a lot more to protect them from that hazard. Personal protection equipment (PPE) is the last line of defense, and safety needs to be addressed from all angles. That’s what’s known as the hierarchy of controls: elimination, substitution, engineering controls, administrative controls, and then we get to personal protective equipment. In fact, Australia banned the fabrication of engineered stone because they determined that the only option to protect workers from developing silicosis is to eliminate the hazard, when using the framework of the hierarchy of controls.

So, the farther upstream that you can stop the problem, the less you rely on the last line of defense to keep people safe?

Yes. At the industrial sites where they’re doing the fabrication of the stone countertops, they’ll use polishing tools that have water-fed systems to keep the dust down. In this case, the engineering control is using the wet method.

The administrative control would be educating the workers, making them aware that they need to use enough water flow, and educating them that when they use the tools at certain angles the exposure risk may increase. Where we run into problems is when, let’s say if it’s cold out and the workers don’t want their hands to get cold, the workers need to understand that they cannot just turn the water off to keep their hands from getting cold, because then they will be polishing dry and exposed to significantly higher levels of silica dust.

Then the personal protective equipment, which in this case would be the respirators, are designed to make sure that if something does get in the air, the workers are still protected. An employer is required to buy the personal protective equipment for the employees. However, for a variety of reasons, we are seeing workers not being provided the protections they should have to prevent disease.

When did the dangers of engineered stone become evident?

The product was first introduced in 1970s in Italy, and then it slowly gained popularity and marketed globally. In the early 2000s in Israel, they started noticing that younger men were having more lung transplants than should be happening, and they were able to tie it to one of the engineered stone companies. Since then, we’ve been seeing outbreaks crop up as the popularity of the material has been exploding. There have identified outbreaks in Israel, Italy, Spain, Australia, and now they’re identifying cases here in the U.S., in particular in California.

When did this issue start to become a concern in Georgia?

I didn’t start noticing the material at fabrication shops here in Georgia until about 2017. But since then, we’ve been seeing it nonstop, and the latency period for silicosis with this exposure to the engineered stone is between seven and 10 years. Note that latency for silicosis when working with countertops would normally be 30 or 40 years — and, actually, people shouldn’t get silicosis at all, because it’s completely preventable.

But we’re seeing a much more accelerated rapid progression, and the diseases is very often complicated with a comorbidity of an autoimmune disorder. They’re seeing workers being diagnosed with not just silicosis, but silicosis and rheumatoid arthritis or scleroderma or a variety of other autoimmune diseases.

The reason why we’re aware of the outbreak in California is because of brave and astute doctors that raised their hand and said that there are young men dying of a disease that is completely preventable and this shouldn’t be happening. When they found cases, they talked to each other and got the state health department involved.

Was that the impetus for this conference you attended at UCLA?

Yes. The stakeholders in California were there to discuss policy options and to figure out how to handle the growing epidemic. From my perspective, I’m worried that there are cases here in Georgia, and we just haven’t identified them yet. We need to figure out how to gather the stakeholders here. Then our next step is determining what to do once we identify cases. Silicosis is a progressive, irreversible lung disease. The only treatment is a lung transplant.

At the conference in Los Angeles, the keynote speaker was an Australian pulmonary doctor by the name of Dr. Ryan Hoy. He explained all the different ways they tried to manage the growing outbreak of engineered stone silicosis patients in Australia through policy changes before finally landing on the conclusion that the only way to prevent the disease was to ban engineered stone countertops. This ban goes into effect this month.

I would love to see our country follow the hierarchy of controls by either finding a safer substitution or alternate product and eliminate this dangerous product from the market.

How does this issue affect the general public in Georgia?

Manufacturing industries and businesses are booming here in Georgia, and if we want to keep growing our economy, we need to do it in a way that keeps our workers healthy and safe, which includes implementing safety and health controls. I hope that safety and health professionals can be invited to the table to give feedback and constructive criticism on how we can keep our workers safe on job. For the countertop industry, this includes protecting the workers fabricating countertops and also making consumers aware that the choices they make when selecting a countertop may have a direct impact on the health of a worker.

I think there is dignity in safe work. People should have the right to go to work and come home in the same condition or better condition than they went to work that day. My dad got sick with brain cancer from exposure on the job, and he died two years ago. Unfortunately, his story is representative of many people who go to work each day just to feed their family, who are not aware of the hazards for a variety of reasons, and then find themselves sick as a result of just trying to make a living.

It would be a wonderful world if we could all purchase items that were manufactured in a way that did not cause harm to the workers making them. I would feel proud purchasing things if I could say that they were ethically fabricated. If we want to be strong as a society, we need to have a strong workforce, a sustainable workforce, a workforce that can contribute to the growth of the economy. The way we do that is by creating safe jobs.