A tentative agreement between Ford Motor Company and the US Department of Energy will help Ford build 3 electric vehicle battery factories in Kentucky and Tennessee. This agreement is meant to spur construction projects that will create 5,000 jobs in Tennessee and 7,500 in Kentucky, and obviously, more ongoing jobs in the factories over time. Whether or not electric vehicles are ultimately a good idea, Ford sees an opportunity to get Federal Government help to move greater amounts of manufacturing capacity to business friendly, lower tax states.
While this particular agreement is a big one, it’s part of a much larger theme. We’ve seen real acceleration in manufacturing loans and subsidies over the last several months as part of a reshoring effort. Clearly, the Biden administration is in favor of job creation and perceived decarbonization through a change to EVs. While they have the reigns, they’re going to push hard to accomplish what they can on that vector. The irony, of course, is that the companies they are partnering with continue to choose “red states” as the place to do business.
We’ve mentioned in the past that in the search for our next investments, we are paying close attention to supply and demand dynamics created by the reshoring efforts and tax regimes. Naturally, this acceleration in some of our favorite states can’t come fast enough. Many of these states have not seen huge investment in multifamily real estate in recent years. But with so many new jobs being created (especially blue-collar jobs), supply and demand dynamics continue to improve despite fears of a recession.