Back when I was business editor, 15 years ago, nobody in Tucson was talking about batteries.
Tucsonans interested in our economy were excited about optics and logistics, aerospace and biotech — industries of the future with well-paying jobs.
Those industries have turned out alright, but events of recent weeks show how you never really know what the future holds, and you have to be prepared to jump at opportunity.
Years ago, nobody was talking about Tucson and batteries. Yet here we are, an emerging center of the growing American energy storage industry.
On Dec. 6, a new company called American Battery Factory announced it had chosen a site near Tucson International Airport to establish a headquarters and its first “gigafactory” for the production of lithium iron phosphate battery cells. It could eventually employ 1,000 people.
Tellingly, the $1.2 billion battery plant will be on a 267-acre property that is part of the county’s Aerospace Research Campus. Note the name is “aerospace,” not “battery” or “energy.”
On Dec. 7, an existing Tucson company, Sion Power Corp., announced a major planned expansion at 6950 S. Country Club Road. There, the company plans to double in size from the current 100-plus employees and scale up production of its lithium-metal batteries for the electric vehicle industry.
On Dec. 13, a little-known local company named Ampcera announced it had received a new $15 million round of investment to help it scale up production of electrolyte materials for solid-state batteries, used in electric vehicles and other products.
What is going on in this town, the place where logistics and space still look promising, but batteries are booming? It all has to do with what’s happening in the state, and the country, and the world.
Globally, weaning ourselves off of fossil fuels requires massively improved energy storage. That’s because some sources of renewable energy — notably solar and wind — don’t produce all the time, so their energy must be stored if we aren’t going to regularly revert to burning fossil fuels.
Similar challenges apply to electric vehicles, which need to store a lot of energy to be able to travel far enough on a charge to make them competitive with gasoline-powered cars.
Also, the global supply chain has shown its vulnerability during the pandemic. When China shut down regions to prevent the spread of the novel coronavirus, it messed things up all over the world, leading to shortages of products, parts and materials. That got people thinking more about bringing the supply chain closer to home.
So did Russia’s invasion of Ukraine, which is heightening the need to break the world’s dependence on Russian fossil fuels and minerals.
Nationally, three bills passed by Congress during the Biden years have promoted bringing manufacturing back to or near the United States. The Infrastructure Act, the Inflation Reduction Act and the CHIPS Act all included incentives to bring different manufacturing activities back to the United States.
Also, when he was president, in October 2020, Donald Trump issued an executive order requiring the federal government to facilitate the development of mining and processing of critical minerals for batteries and other key products.
As it turns out, the Arizona Commerce Authority has already been succeeding at bringing advanced manufacturing into the state. The authority has been cultivating the electric vehicle and semiconductor industries, both of which have huge needs for energy storage.
Lucid and Nikola have begun production of electric vehicles at new plants in Pinal County. Intel is opening two new semiconductor fabrication plants at its Chandler campus, and on Dec. 6, TSMC announced a new $40 billion investment in Phoenix-area fab plants.
“The ecosystem brings benefits across the state, said Patrick Ptak of the authority. “The Phoenix/Pinal County/Tucson corridor will just increase the interconnectedness.
Locally, Tucson has watched jealously as many of these projects have been announced elsewhere in Arizona. But now they are also landing here in our own little emerging energy node.
To be fair, the idea is not completely new. Back in 2014, when Tesla was looking for a site to build a battery plant for its electric vehicles, Tucson went in hard to land the plant. Tucson was competitive enough that Tesla officials visited and checked out potential sites, but they ultimately chose a site near Reno for their gigafactory.
Tucson and Pima County have been laying the groundwork for something like the American Battery Factory plant, though. The county bought 400 acres south of the Raytheon plant in 2012 and began realigning Aerospace Parkway in 2015, to make room for Raytheon to expand and for other aerospace and defense businesses to come in.
The county prepared the area for businesses to move in and called it Aerospace Research Park. Raytheon announced a major expansion in 2016, but other beneficiaries of the park haven’t thrived so well. World View Enterprises, the stratospheric balloon company, has not grown as projected, and the county’s generous lease deal with World View was recently ruled a violation of the state constitution‘s Gift Clause.
The deal with American Battery Factory is different, the county’s economic development director, Heath Vescovi-Chiordi, said, because it requires a purchase of the property at an appraised value, unlike the World View deal. The deal also requires the company to reach certain thresholds for employment, construction build-out, and salary levels in order to trigger the purchase of the property.
So now, the aerospace park is poised to become home to a vertically integrated battery park, of sorts, as the CEO of the new company, Paul Charles, told me.
“Our vision is to have a campus where we have full integration,” he said. “We’ll have multiple companies that will co-locate with us. They’ll take our cells and make end products.”
Tucson has had its hopes dashed enough times that I’m not counting on this vision becoming reality. But preparation and flexibility seem to be paying off in an unexpected way.
Tim Steller is an opinion columnist. A 25-year veteran of reporting and editing, he digs into issues and stories that matter in the Tucson area, reports the results and tells you his conclusions. Contact him at tsteller@tucson.com or 520-807-7789. On Twitter: @senyorreporter
See how Tucson-based Sion Power is seeking to advance electric vehicles with its new, high-energy lithium-metal batteries.
