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As states compete for control over the reconstruction of the U.S. supply chain, the production of electric vehicles is a key area of conflict. Offering significant incentives, southern states like Georgia, North Carolina, Tennessee, and Kentucky were able to secure significant Hyundai, Ford, Rivian, and Volkswagen factories. Not to be surpassed, Michigan is attempting to maintain its position as the world’s leading producer of automobiles by providing substantial incentives of its own, along with a $1 billion agreement with GM.

Michigan has served as the core of the auto industry for decades. However, the industry is now stating unequivocally that it is not constrained by custom.

The transition to electric vehicles is unquestionably the biggest realignment in the sector since mass production started in Michigan at the turnaround of the 20th century, and it is speeding quickly as the cost of fossil fuels increases and battery technology advances. Additionally, it gravely compromised Michigan’s position as the nation’s automotive capital.

Startups like the Amazon-backed Rivian and the Vietnamese company VinFast are investing billions to construct facilities in Georgia as well as North Carolina, respectively, in the Southeast. Hyundai of Korea has said that it will open a branch in Georgia. Volkswagen has a sizable plant in Tennessee and wants to grow there.

But Michigan suffered a setback last year when one of the most illustrious firms, Ford, announced it would invest $11.4 billion to create “Blue Oval City,” a manufacturing complex in Tennessee, as well as a pair of battery plants close by in Kentucky. According to the business, the expansion will generate almost 11,000 new employment opportunities.

Gretchen Whitmer, the governor of Michigan, remarked in an interview that “no one likes to see that, right?  I mean, that was sort of a shock,”

It was sufficient of a shock to convince Democrat Whitmer and the Republican-led state legislature to quickly agree on a set of incentives meant to compete with the offers that other states used to lure EV manufacturers. State and local incentives of $1.5 billion are being given to Rivian by Georgia, for instance. In order to entice VinFast, North Carolina committed to pay approximately $1.2 billion. Ford will receive $883 million from Tennessee and an additional $250 million from Kentucky.

So, only weeks after Ford’s shocking declaration, Whitmer approved legislation that included a substantial incentive fund worth 1 billion for “strategic outreach and attraction.”

If there is resentment about having to spend so much money only to keep an existing industry in Michigan, it is not being expressed. According to Whitmer, it is his responsibility to guarantee that we do possess all the resources available to us so that we can compete with what the other states are offering these businesses in an effort to secure their investment. General Motors, another native Michigan firm, gladly accepted the bait.

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