Can electric car company propel city’s economy into the future?
When electric-vehicle manufacturing startup Mullen Technologies announced Memphis would become its manufacturing hub, it didn’t just signal the return of automobile manufacturing to the Bluff City for the first time in more than six decades. It was also the starting bell for Memphis’ entrance into a rapidly-growing industry on the frontlines of the future of transportation in this country.
The California-based company’s selection of Memphis has the potential to impact the city’s economy for years to come, said Reid Dulberger, president and CEO of the Economic Development Growth Engine of Memphis and Shelby County.
“If the development team is able to bring this project to fruition, it gives us a toehold in one of the most exciting new industries in the world,” he said. “Electric vehicles, ultimately self-driving electric vehicles, are going to revolutionize transportation.”
The foray into the future could directly create hundreds of jobs for Memphians and “add substantial new payrolls” to the community, Dulberger said.
And like the existing automotive industry, the electric-vehicle industry is expected to spin off other businesses. Memphis will be able to leverage having Mullen in the area, along with the advanced technology that comes inherent with electric vehicle creation and assembly, to bring in other advanced industries, Dulberger said.
Mullen said it plans to spend more than $336 million setting up shop in
the more-than-817,000-square-foot warehouse at 8400 Winchester Road. About $299 million will be spent on equipment and another $26 million will be spent renovating the building, which formerly housed a Nike distribution warehouse.
Those efforts are expected to take almost three years.
Company executives said they expect to start production of vehicles in Memphis at the end of 2023, and in the five years following, they hope to directly create more than 800 jobs and deliver more than 100,000 vehicles, starting with a crossover SUV model.
The crossover is under design at the company’s California headquarters and a second model is in the works, according to the company.
The company was awarded a 15-year Payment-in-lieu-of-taxes incentive worth more than $40 million from EDGE. The day after the PILOT was approved, Mullen released a statement indicating it intended to secure a longterm lease on the building.
Property records show the building was purchased by South Carolinabased Realop Investments in July 2020 for $16 million.
Commercial real estate firm CBRE facilitated the sale to Realop, and at the time Patrick Walton, senior vice president at CBRE’S Memphis office, said the facility was in a prime location.
“Future tenants will benefit from the property’s proximity to an untapped
labor pool to the north and being (plus or minus) 10 miles from the airport. We need large bulk industrial space in the Memphis market and the Southwind Distribution Center will accommodate the mass activity we are seeing on the big box front,” Walton said in a statement.
Finding an ample skilled workforce
That labor pool was one of the things that drew Mullen to Memphis, said Ted Townsend, chief economic development officer for the Greater Memphis Chamber. In discussions with Mullen, the chamber provided them with workforce data he said Mullen executives found encouraging.
Townsend said some specialized training might need to be done, but there is a large pool of skilled manufacturing workers in the Memphis area who have translational skills.
“We already have a density of workers in that space,” he said.
Dulberger said Memphis already had a steady supply of skilled manufacturing workers due to the sizable medical device manufacturing industry in the area and has institutions to train workers for those jobs.
He said that makes him optimistic Memphis will be able to provide the workforce Mullen needs, rather than workers moving to the area to take the jobs. In addition, he expects the assembly plant to indirectly lead to many more jobs for Memphians.
“We would expect to see suppliers locate facilities here in our community. We would expect to see spin-off benefits for our local universities,” Dulberger said. “Electric cars are largely built on software so there are a lot of development spin-off activities for electric vehicles that one could imagine coming to Memphis that would be different from a traditional automobile.”
Townsend said with most car plants, for every job a manufacturer directly creates, 14 other jobs are created around it, either in related automotive sectors or to serve the people who work at the facility.
And bringing hundreds of workers into a building that has sat vacant for half a decade will benefit the businesses around it, Townsend added. Mullen employees will buy gas at the Circle K down the street, pick up groceries at the nearby Costco or Kroger and grab lunch from one of the mom-and-pop or chain restaurants that line Winchester, bringing money to those businesses and tax revenue to the city and county.
‘Key strategic advantages’
Incentives from local and state authorities were part of the reason Mullen chose Memphis over locations on the west coast, said vice president of manufacturing John Taylor. Its reputation as a logistics hub — Mullen’s factory will sit right next to the Fedex Express World Hub Headquarters — was another bonus.
“Memphis’ location makes it a primary logistical hub for distribution throughout the U.S. and will provide Mullen with key strategic advantages,” Taylor said in a statement.
Looking at supply chain logistics, locating in Memphis makes more sense than locating in Washington or California, Townsend said. There’s a high concentration of automobile parts suppliers stretching from Michigan to Mobile, Alabama, and Memphis is the “center of that spine,” he said.
Looking more broadly, Gov. Bill Lee has said he wants the state to be at the forefront of electric vehicle manufacturing and the state has partnered with multiple organizations to increase the number of electric cars produced in Tennessee and driven by Tennesseans. Part of the effort includes building a statewide network of electric vehicle charging stations.
U.s.-based and international car companies have recently been announcing plans to introduce new electric vehicles or, in the case of some companies, including General Motors and Jaguar, to go entirely electric.
The Nissan plant in Smyrna already produces the electric Leaf and the Volkswagen plant in Chattanooga is going to produce two types of electric cars in the future. But Mullen will be the first all-electric plant in the state.
“I think it’s a tremendous catalyst for the local economy to enter an industry sector that obviously has garnered a tremendous amount of interest and investment,” Townsend said.
Memphis hasn’t produced cars since the Ford plant — where Townsend’s grandfather worked — closed in 1958. Now, he said, it’ll be producing the kind of cars everyone will drive in the future.
Corinne Kennedy covers economic development, soccer and COVID-19’S impact on hospitals for The Commercial Appeal. She can be reached via email at Corinne.kennedy@commercialappeal.com or at 901-297-3245.