$1 billion battery manufacturing plant proposed for southern Arizona
Utah-based American Battery Factory is planning to build a $1.2 billion battery manufacturing plant in southern Arizona across 267 acres, according to Pima County documents and the startup.
The new factory is expected to hire 1,000 employees at full build-out, with average annual salaries of $65,000, and have an estimated economic impact of $3.1 billion over a decade.
American Battery Factory’s facility will be developed in three phases and located at Pima County’s Aerospace and Research Campus, south of Tucson International Airport between Interstates 10 and 19.
On Dec. 6, the Pima County Board of Supervisors is expected to vote to enter into a lease-purchase agreement with ABF for the property, which will allow the company to develop its facility, according to county documents.
Through the agreement, the county would initially lease up to 70 acres for the first phase with the option to purchase the land if job and construction benchmarks are met. The appraised value of the overall site totals $23.2 million.
The initial lease of 70 acres will cost $455,000 in year one and increase annually to $502,250 by the fifth year of leasing. If the company wants to purchase the 267 acres at the end of two years of leasing, the sale of the land will total $20.9 million, or 90% of the appraised value, documents added.
ABF said on Wednesday that the factory is its first in a planned series of U.S.-based gigafactories producing safe lithium iron phosphate battery cells.
“American Battery Factory is energized by the possibility of opening our first factory in Tucson, Arizona at a site located in the heart of the county’s growing Aerospace Research Campus,” the company said in a statement on its website. “We have been in close coordination with officials at all levels of state, county and city leadership to ensure that our proposal for the site will benefit both the local community in Tucson as well as the broader Arizona economy.”
The company said it will share more details about its proposal for Tucson pending the approval of its agreement on Tuesday.
American Battery Factory’s proposed plant is the third large-scale factory to be proposed for Arizona in the past two years following KORE Power’s announcement to build in Buckeye and LG Energy Solution’s plans to build in Queen Creek.
Incentives offered for company
Pima County is proposing incentives for ABF that are limited to job training support, recruitment assistance and support for a foreign trade zone designation on the site, which significantly decreases property taxes. ABF is also seeking incentives from the city of Tucson and the Arizona Commerce Authority.
ABF, which was incubated from energy storage firm Lion Energy in 2021, is a lithium-iron-phosphate battery cell manufacturer. It has established several supplier relationships and off-take agreements for the LPF cells that would developed at the county’s ARC, documents said.
Pima County’s economic development team and regional partners have been in discussions with the company, through codename “Project Flag,” since January of 2022, documents said, adding that it’s been working on terms of a lease-purchase agreement with ABF since October 2022.
The estimated water use for the facility is 150,000 gallons per day, or about 54 million gallons annually, while the wastewater capacity is expected to total 25,000 gallons per day at full build-out, according to county documents. An air quality permit is not expected to be required.
In addition to more manufacturing operations moving to the U.S. and states like Arizona, the energy and electric vehicle industries have also started to ramp up across the nation with more electric vehicle factories and battery plants to support the growth of the automotive industry.
As more operations expand to Arizona, the state will also have to figure out how to train and supply enough workers in the manufacturing industries. Already this year, the National Association of Manufacturers estimated that there were more than 11,000 manufacturing job openings in Arizona during the first 45 days of 2022.