OKLAHOMA CITY — Gov. Kevin Stitt’s administration is betting big on electric and hydrogen-fueled vehicles coming to Oklahoma.
Officials say they’re pressing forward with an aggressive recruitment campaign courting as many 14 different companies, including one business that is reportedly eyeing a location in Pryor that could create as many as 4,000 to 6,000 jobs in northeast Oklahoma. That’s on top of an announcement last year that involved 2,000 manufacturing and related jobs.
To kickstart the effort, Stitt has pledged a record-breaking $15 million in capital to start-up electric vehicle company Canoo and is urging Republican lawmakers to overhaul some of the state’s tax incentives to further sweeten the pot for companies that bring at least 1,000 new jobs to the state and a $1 billion in new investment.
“We’re hoping to create the Oklahoma automotive corridor,” said Jennifer Springer, director of business development at the state Department of Commerce. “We think we’re competitive there, at the way the automotive industry is shifting.”
For decades, the Midwest has traditionally been home to the nation’s automotive juggernauts, but experts say changing technology and growing wage pressures have opened a new frontier for states like Oklahoma that have long wished to diversify their economies and are willing to make the financial investment to do so.
The ultimate vision is to have large companies that manufacture vehicles, but to cluster around them a reliable supply chain of businesses that would create as many as 100 to 200 additional manufacturing jobs in rural communities, Springer said.
“If we can bring companies like Canoo and some of the supply chain companies here to Oklahoma that helps us establish a cluster and then it’s much easier to recruit businesses in the future to come to Oklahoma because we’d already be kind of known as an automotive state,” she said.
In response to a CNHI Oklahoma open records request filed in October, Department of Commerce officials Thursday released contracts that indicate they’ll pay Canoo a record-setting $15 million in cash from the Governor’s Quick Action Closing Fund. The funds will be paid out as they meet a series of performance metrics, and the contract contains bankruptcy protections should the company go under.
Canoo, which announced plans to open an electric vehicle manufacturing facility and customer service and financial center in Pryor’s MidAmerica Industrial Park, is pledging to create over 2,000 new jobs at an average salary of at least $64,430 and to make an overall capital investment of over $550 million over the next decade, according to contracts. It has also reportedly received a package of local tax incentives.
In November, Canoo also announced that it has selected Bentonville, Arkansas as its headquarters, and that it will establish a research and development center and what it called “an advanced industrialization and low-volume production facility for small package delivery vehicles in the state.” That is expected to create 545 jobs.
Bentonville is about 75 miles from Pryor.
Canoo also affirmed in that state its commitment to build a manufacturing operation in Oklahoma, adding its plans “are part of transforming the U.S. Route 412 corridor from Oklahoma through Arkansas into a center of electric vehicle research, development and manufacturing power.”
The company, which doesn’t have any vehicles on the market currently, has said the Pryor factory is slated to open in 2023. It will include a paint and body shop along with a general assembly plant.
Springer said it takes money to woo large automotive projects.
“We want to be an automotive state, (and) we feel like we have the assets to be competitive in recruiting them here,” she said.
Springer also said she couldn’t discuss specific details about ongoing negotiations with a large company, but confirmed it would bring 4,000 to 6,000 new jobs to Oklahoma.
Ben Lepak, executive director at the State Chamber Research Foundation, said there’s a lot of activity in the electric vehicle arena right now, and states such as Georgia and Tennessee have reaped the rewards of big economic development projects.
“What’s attractive, I think, to states about those projects is they come with huge, huge amounts of capital investments, job creation,” Lepak said. “So there’s a lot of just ripple effect, positive ripple effect that comes from that.”
Oklahoma officials have also recently recognized that the state has the necessary ingredients that are needed to build a thriving hydrogen industry, including the natural gas component and the existing pipelines to transport it. Oklahoma already has industries that are very skilled at all the components that it would take to create hydrogen, Lepak said. Hydrogen is a clean alternative fuel source.
“There’s a lot of competing energy technologies out there kind of vying for what’s going to be dominant,” Lepak said. “And it’s kind of hard to predict, but I think that’s why the state sees the opportunity.”
But Lepak said Oklahoma is going to need to offer more lucrative tax packages to successfully court what he terms the “mega projects” — economic development projects where a company invests at least $1 billion and creates at least 1,000 jobs. He said he did not classify Canoo as a “mega project.”
His organization recently analyzed Oklahoma’s business climate and found that the state’s relatively low tax burden, favorable regulatory environment and focus on courting large businesses makes the state competitive.
But, he said Oklahoma lacks competitive tax incentives specifically targeted at mega projects. His group recommends tweaking Oklahoma’s existing incentives to provide an extra layer of incentives that would enable economic developers to go after the biggest projects.
Neighboring Kansas just passed legislation that would do that, but though similar legislation is pending in Oklahoma, it hasn’t passed yet, he said.
Media reports have indicated that Oklahoma is competing with Kansas to win a massive electric vehicle battery manufacturing facility. Kansas officials also have been mum on the company, but some media reports have identified Panasonic as the battery maker. Last fall, Canoo reached an agreement with Panasonic to supply batteries for what it is calling its “lifestyle vehicle.” No details of the agreement were reached.
State Rep. Trey Caldwell, R-Lawton, said there’s a battery manufacturer looking at coming to Oklahoma, and Stitt is pitching a plan to Republicans that would create an incentive package. It would potentially include local funding, ad valorem reimbursements and federal coronavirus money coupled with tax relief for a certain segment of manufacturing that is predicated on job creation and performance.
Caldwell said no one has officially released the name of the company, but said the company has been in business for over 100 years and lawmakers have been told it could create as many as 6,000 new jobs.
Stitt recently said he couldn’t talk about incentive packages being offered to a large company, but said the Legislature is working through it. He said there’s a non-disclosure agreement that prohibits him from specifics, including the name of the company.
He said he had met with the House Republican caucus in February and is pitching an added benefit to the state’s quality job act for major companies that plan to invest over $1 billion and hire over 1,000 employees.
“Listen, we’re open for business in Oklahoma,” Stitt said.
State Rep. Kevin McDugle, R-Broken Arrow, chair of the House’s business and commerce committee, said Oklahoma leaders want electric vehicle companies in Oklahoma because as technology improves, that means more jobs.
He’s supportive of performance-based tax credits and said it’s about time that Oklahoma is on leading edge instead of being last.
“I think we’ve got enough business minds now that are driving in the same direction as far as policy goes as far as knowing that locations have to have critical infrastructure and things like that,” McDugle said.
Source: TAHLEQUAH DAILY PRESS
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