State incentives for EV factories getting wasteful

State and local incentives for electric vehicle assembly plants — seemingly growing by the week — are getting out of hand.

Rivian this month secured a whopping $1.5 billion from state and local officials in Georgia for its proposed $5 billion factory east of Atlanta.

Georgia’s generosity came even as investors became disenchanted with the direct-selling EV startup, with shares plunging 21 percent Monday, May 9, alone after Ford Motor Co., a prominent backer of Rivian, sold 8 percent of its stock.

Rivian’s award steps up the madness of exorbitant offers made by state and local politicians to secure EV or battery manufacturing in their states.

General Motors and LG Energy Solution received $824 million in incentives from Michigan for investing $7 billion in EV and battery manufacturing in the state. The incentives include a first-of-its-kind $600 million direct taxpayer grant from the state of Michigan.

Ford and its battery partner SK Innovation will receive $884 million in incentives for a $5.6 billion EV campus in Tennessee.

And Stellantis will be awarded up to $796 million for retooling two assembly plants for EV production in Ontario, a $2.8 billion investment for the automaker.

Officials who promise these incentives for each of the automakers have clear intentions — job creation. Dozens of states have been competing for EV investment over the past year. Making a case for directing business to your state or province is sensible and competitive; paying $200,000 per job is wasteful and foolish.

McKinsey forecasts that total global auto industry employment, about 34 million jobs today, will shrink by about 13 million jobs by 2050. Some positions specific to zero-emission vehicles will be created, but there won’t be enough to replace lost conventional-powertrain jobs, McKinsey says.

State and local governments have a role to play as the industry transitions to EVs. They should focus on developing the necessary infrastructure for EVs, efficient manufacturing locations and a skilled work force.

Automakers new and old agree that EVs are the future, and they need to invest billions of dollars to evolve. That will happen with or without profligate incentives from states.