Episode Transcript

Cortney Piper: Welcome to Energizing Tennessee, powered by the Tennessee Advanced Energy Business Council and FirstBank. We’re your number-one podcast for news about Tennessee’s advanced energy sector. I’m your host, Cortney Piper.

If you haven’t realized by now, I love talking about the growth of Tennessee’s automotive sector. I’ve spoken with plenty of key automotive players in the state, from Ford’s BlueOval City to TEAM TN. Today, we’re zooming out and speaking with Autos Drive America, an organization that advocates for open trade and investment policies that expand employment opportunities for Americans and choice for all consumers.

I spoke with Jennifer Safavian, President and CEO, about the international automotive presence in Tennessee, how the Inflation Reduction Act and other recent federal policies impact the sector, and the organization’s 2023 Economic Impact Report. Their report found international automakers built 413,746 vehicles in the volunteer state, creating more than 109,000 local jobs in Tennessee and contributing $15.7 Billion to the state GSP. Keep listening to hear more about the report and other interesting insights about this growing part of our economy. As always, if you like what you hear, subscribe to our channel, and don’t forget to leave a rating or review. It helps us reach a wider audience to champion Tennessee’s advanced energy sector.

Energizing Tennessee would not be possible without the support of TAEBC members and our sponsor, FirstBank. To learn more about FirstBank and how they can support you or your business, visit FirstBankOnline. com.

Jennifer Safavian, President and Chief Executive Officer of Autos Drive America, thanks for coming on the show. 

Jennifer Safavian: Oh, thank you, Cortney, for having me. 

Cortney Piper: All right. First, Jennifer, tell our listeners a little bit about yourself.

Jennifer Safavian: Sure. So, let’s see. Born and raised in St. Louis, Missouri. I went to law school in Michigan at Michigan State University.

Spent a little time out there practicing law before I moved to the Washington, D.C. area, where I also practiced law, but I also kind of was bit by the political bug as it is out here and spent about 16, 17 years on Capitol Hill, actually. And from there, once I left the hill, I started working in the trade association space.

 So this is my actual second trade association, Autos Drive America. We started in 2020, and I was the first President and CEO of the organization kind of helping it start from the ground up. So it’s been a pretty exciting time. 

Cortney Piper: Excellent. And it’s always nice to have somebody who spent a little bit of time in Michigan on the show.

 I am originally from Grosse Pointe Woods, Michigan. I came to Tennessee to swim and go to school at the University of Tennessee. So it’s always nice to have that little Michigander connection. 

Jennifer Safavian: Yes. And I do go back to Michigan frequently said to visit family. 

Cortney Piper: Excellent. Excellent. Okay. So, for those unfamiliar with Autos Drive America, who are you, and what’s your mission?

Jennifer Safavian: That’s a great question. So Autos Drive America, we’re a trade association based here in Washington, DC. We represent international automakers with US operations, so we focus on what’s happening here in the US with regard to our members. and we advocate in front of the federal government and sometimes at the state and local areas but focus on the federal government side of things.

And our mission is really to help continue to grow the US automotive industry. Make sure it remains competitive. it’s a great industry here in the US but there’s lots of competition. It’s a global industry. So always very cognizant of what’s happening around the world. One of the biggest issues that we focus on here on our policy issues is trade. We’re always trying to push for more trade policy that allows us to export and sell more of the American-made vehicles. My members make here in the US, and we’re also very cognizant, and we want to make sure that there’s a level playing field for all automakers here in the US. 

Cortney Piper: Excellent. we had our former governor and our former state senator, Lamar Alexander, was the one who championed and led foreign investment in foreign automakers and the investment in Tennessee, starting with Nissan. And, from his leadership, we’ve had all of this fantastic investment in the automotive industry as a whole, but he’s really focused on investments from Japan in particular in the automotive supply chain.

So we have Lamar Alexander to thank for sort of bringing us together today. I always love to give our former governor a little shout-out there. So Jennifer, why do you do this work, and what sparked your interest or what’s kept you in the industry all these years? 

Jennifer Safavian: Sure. So, I will tell you, it was, first of all, it was an exciting time when they started, stood up this new organization, Autos Drive America, and it happened at a time when the two other auto associations just merged and became one association.

So they’ve got my members, international automakers, as well as the Detroit automakers under that umbrella. But at that time, my members felt like they needed maybe their own voice. and that’s when they stood up Autos Drive America as a standalone organization. So it was an exciting time to kind of build something new.

Unfortunately, we started in 2020 at the height of the pandemic, nobody could have predicted, of course, that when we started, we would all be shut down in a few months thereafter and, of course, spend some time at home, but we got up and running nonetheless. I think it’s been really important that the international automakers have a specific voice.

 They have so much investment here in the US and all that they do in the communities. And, of course, all the workers that they employ and the careers they provide. But I think it is really important that they have an organization like Autos Drive America to help promote that.

And to help explain to policymakers just about their presence. I mean, they are across the entire United States. So it’s really important not to mention, I mean, these are fantastic brands to be representing. My very first vehicle when I got my driver’s license was a Toyota.  There are just so many fabulous models that my members make for people to choose from.

Cortney Piper: You all recently released a 2023 economic impact report. What were some of the highlights from that report, specifically when it comes to green manufacturing investments, workforce development, and green vehicle sales? 

Jennifer Safavian: Yes, thank you for mentioning that. Every year we put out an economic impact report that highlights the impact that international automakers and international dealers have in the United States.

And so we work in conjunction with the dealer side of this as well. And you can find actually the entire report on our website at autosdriveamerica.org. And it’s just got so much information in it, broadly speaking at a national level and then by state. So, there’s information about each state and the impact that international automakers and dealers have on each state. So there’s a lot of information in it. But with regard to your specific question about kind of the green manufacturing and the workforce, there has been just so much with regard to the transition to electrification in this country by all the automakers, but especially by international automakers.

And I can tell you that they have pledged $22.5 billion towards green manufacturing just from 2020 to 2022. So, in that short time span, that’s a lot of investment. It is amazing, it really is for this transition to electrification and more coming. They continue to come more investments are being announced, and there’s more development happening even as we speak. So, they’re all working towards this electrification and it takes time, but they’re all devoted and dedicated to it. And that’s just on the investment side of things, of course, and producing the models and all of that. But on the workforce side, which is really key and critical, they have been working to prepare their workforces for this transition to electrification. So they’re working tirelessly to educate their workforces on electric vehicle production. and we’re having a lot of success.

And just to give some particulars with regard to Tennessee, for instance, Volkswagen in Chattanooga recently, their great example about how they retooled their assembly line for EV production. They’ve upskilled their team members to meet these challenges. And, I think given how popular the ID4 is, I’d say that they’ve actually done a really good job in this whole transition. 

Cortney Piper: Absolutely. Now, let’s talk a little bit more about Tennessee and the international automotive presence that we have here. What do you think makes this state so ripe for automotive investment?

Jennifer Safavian: Yeah, there is so much happening in Tennessee. It’s really a fantastic story. It’s a good example of about really for the whole South Southern states, right? The southeastern states as a whole, to be honest with you.

But I think for Tennessee in particular some of the, some of the factors that make it attractive, I think, of course, the reliable and affordable energy that helps keep production costs low for manufacturers. I mean, that’s just really important. According to Department of Energy data, Tennessee has the fourth lowest industrial electricity costs in the nation.

So it’s around two cents per kilowatt hour, which is lower than the national average. That may not seem like very much, but when you think about how much energy actually is required for auto manufacturing, that’s millions of dollars that can be saved. There’s also good access to supply chains and resources, which of course, is also really critical when you’re producing vehicles. Good rail and road connections, as well as several large east coast ports, which are nearby. So that’s really important as well. The state of Tennessee has also been a good partner, with the automakers providing appropriate facility sites and helping set up workforce development programs, which is really important.

And, there are several top-tier universities, of course, in Tennessee that help create that talent pipeline that is so necessary. for the automakers to be successful. There’s potential for research and development growth. Like Volkswagen’s North American Engineering and Planning Center and its battery and engineering lab are located in Chattanooga, and they’ve got an innovation hub in Knoxville. not to mention, that they recently joined forces with the University of Tennessee in Knoxville to accelerate their research collaboration. So there’s just so many opportunities that they have provided to automakers to make it a really great place to invest.

Cortney Piper: Absolutely. And I know, we have done such a great job attracting manufacturing, aspects of that. And I think you will see a more intentional focus within the state on also attracting the R&D aspects from all the automakers to Tennessee because we do have those top-tier research assets that include Oak Ridge National Lab. So Keep an eye on us for that, Jennifer. 

Can you speak to how the Inflation Reduction Act and other recent federal policies are impacting the automotive sector?

Jennifer Safavian: Yeah, sure. So, the Inflation Reduction Act that’s actually a big a big piece of legislation that passed over a year ago and was signed into law, and, of course, we in the auto industry have been anxiously waiting as guidance has been coming out slowly but surely with regard to how to implement all of that.

And it’s really significant with regard to this transition to electrification because it, in it has the opportunity for consumers to get up to $7,500 a rebate on electric vehicles. So, to help, increase the electric vehicles being sold to consumers. But with it also though is a big component that is also trying to get moving supply chains, right?

And, and bringing those more back here to, to either the US or the North American region and really trying to get away from China. so it’s, it’s significant in a lot of different ways. And for the auto industry, we’ve had to work through this, to be honest with you. And things are not gonna happen overnight.

It’s gonna take some time. I think everybody agrees that we need to do more locally and, of course, more domestically. but not everything can be done here in the United States that’s gonna take time. For instance, the critical minerals that are so important to building these vehicles.

China has a very large lead on all of that and almost a monopoly in some of the actual minerals that are needed. So it’s not something we can find here and we don’t have production here in the United States. And even to start up a new mine could take seven to 10 years. So we have to look to other sources as well; as part of the Inflation Reduction Act, at a certain point in time, any materials, critical minerals, or battery components that come from China can make a vehicle ineligible to receive any of the credits. so in the meantime, we are working, and the automakers are working to try to find other places where they can they can get these minerals. And I will say, I think the administration understands the difficulty in that, again, this is not something that can happen overnight. It takes time. And so we’ve been working closely with the administration to help us just as they put these rules in the. guidance together to understand kind of the barriers that exist to this transition. But I do think it is critical, and to help get consumers get more of these vehicles, these electric vehicles on the road. not to mention there’s other production credits in there to get battery manufacturing in this country started. So there’s, there’s a lot of a lot of good that can come from it as well. 

Cortney Piper: Absolutely. Now, talk a little bit more about how international automakers are working to increase access to electric vehicle technologies. You talked about some of the barriers, but just a little bit more about what the international automakers are doing to increase access to EVs.

Jennifer Safavian: They’re introducing new models all the time, really focusing on what consumers, what families are looking for. and really, you know, trying to make them as affordable as they can, which is why you’ll see lots of different options, models, and different price points out there.

And so that is, I think, really important. There’s a big education I think that needs to be done for consumers to understand. I think there’s a lot of unknown, right, about this transition to electrification and what it means to own an electric vehicle. And I’ll tell you for myself. When I test-drove one, I mean they’re amazing to drive, but you do immediately have that concern of how do I charge this thing?

Where can I charge this thing? And so there is a lot of education that needs to be done, not to mention we need to build out the infrastructure in this country. And that’s something that, of course, the government is in the process of doing, but so are my automakers. to be honest with you. They have also come forward and are investing a lot of money to produce and increase the number of these charging stations that we have around the country.

And I think that that’s really key for adoption. I think that when consumers are polled about this, I think their number one concern is can I charge this thing? Can I go on a road trip? And we’re working towards that in the country. And so I think you will get there soon.

And I think once, like I said, once I think a consumer drives an electric vehicle, it’s hard not to really enjoy it because they’re fun to drive. 

Cortney Piper: They are. I’ve had the opportunity to drive several different models and they are, they’re just, they’re fun. They’re so different. You know, you get in the car, and it’s a little bit of a shock, and then you just ease right into it. 

Jennifer Safavian: Yes. And, and then they’re, then they’re modern and they’re, and they just got a lot of new things in them. So, like you said, they’re fun. They are. 

Cortney Piper: They are. Well, Jennifer Safavian, President and Chief Executive Officer of Autos Drive America, thanks for coming on the show. Tell our listeners where they can learn a little bit more about you and your work.

Jennifer Safavian: Wonderful. Thank you again for having me. This was a pleasure to talk to you about this. Again, you can learn more about Autos Drive America and my members if you just go to autosdriveamerica.org. You can find a lot more information on our website there. 

Cortney Piper: Excellent. Easy enough. Jennifer. Thank you. 

And that’s our show.

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