SB&D Exclusive: Chinese automaker sniffing around the Southern Auto Corridor for a site

SB&D has confirmed a Southern site search by a Chinese automaker just after the first of the year, which SB&D is keeping confidential until more information is gathered. With the right economic environment, Chinese autos and automakers could be in the U.S. sooner than you think.

• China automakers make more vehicles than any country on Earth.

• China more than doubled U.S. light vehicle production in 2025.

• In 2025, China produced one-third of all cars worldwide.

• China eclipsed Japan as the world’s largest exporter of vehicles in 2023.

• Chinese automakers would rather build plants in the U.S. than rely solely on exports to North America. 

• In fact, multiple Chinese automakers are actually preparing for the day they can build assembly plants in the U.S. 

• China is particularly competitive when it comes to electric vehicles.

• A Chinese automaker locating here would be a boon to the Southern Automotive Corridor, as it has essentially taken down Detroit in three-and-one-half decades.

• The formal entry into the U.S. would bring more choice and capacity, which means lower prices. That has been the case in Europe since Chinese automakers entered that market.

“The ambition is there,” said Lei Xing, former chief editor of China Automotive Review magazine. We predict it is just a matter of time before as many as three new full assembly Chinese plants are built, not in the U.S., but in the Southern Auto Corridor. 

 

Prices for vehicles are increasing

Tariffs on imported parts and vehicles are contributing to higher vehicle prices. Some analysts estimated tariffs could add thousands of dollars to the sticker price of new cars, or an estimated $3,000 to $6,400 per vehicle. Foreign automakers are taking the hit, too. Hyundai reported a 40 percent drop in profit due to U.S. tariffs, even though it and sister company Kia set sales records for 2025 as buyers purchased cars last year en masse to avoid the implementation of the tariffs. 

Some predictions for 2026:

• GM estimates that tariffs will cut into profits by roughly $4 billion in 2026. 

• Tesla builds most of its U.S. consumed vehicles domestically, so unlike foreign imports, it does not face direct import tariffs on finished vehicles. 

• Ford anticipates tariffs reducing gross profit by about $2.5 billion. 

• Based on tariff modeling, Toyota expects a significant hit to net income in the range of 21 percent due to tariffs and other rising costs. 

• Hyundai and Kia have seen their profits plunge by 40 percent in Q4 2025 until recent tariff relief. 

• VW, BMW and Mercedes’ tariff exposure is very high, cutting into profits for U.S. consumption. 

 

Toyota investing nearly $1 billion in the Southern Automotive Corridor

Japanese automaker Toyota is investing $912 billion in its existing facilities in Mississippi, West Virginia, Kentucky, Missouri and Tennessee. It has already made a huge announcement at its plant in Limestone County, Ala., to increase its drivetrain production. From the Toyota report: 

Toyota’s U.S. manufacturing presence is expanding again to meet growing demand for hybrid vehicles. As a part of Toyota’s recent commitment to invest up to $10 billion in the U.S. over the next five years, the company announces a $912 million investment and 252 new jobs across five manufacturing plants to increase hybrid capacity and bring hybrid-electric Corollas to its production lineup.

 

A state-by-state look at Toyota’s new investments, totaling $912 million and 252 new jobs:

Toyota Kentucky

$204.4 million, 82 jobs

Toyota’s largest plant globally, located in Georgetown, Ky., will add 82 jobs and install an all-new machining line for four-cylinder hybrid-compatible engines, lining off in 2027. The power-train facility can assemble up to 700,000 units annually. Toyota Kentucky employs nearly 10,000 team members and represents an investment exceeding $11 billion.

Toyota Mississippi

$125 million 

Toyota’s Blue Springs, Miss., plant will add the hybrid-electric Corolla, marking the first electrified Corollas assembled in the U.S. The plant employs 2,400 and represents a $1.3 billion investment.

Toyota Tennessee

$71.4 million, 33 jobs

Toyota’s casting plant in Jackson, Tenn., will add 33 jobs to increase production of hybrid transaxle cases and housings and engine blocks for hybrid vehicles. The investment includes three all-new production lines and will increase production capacity by nearly 500,000 units annually. Production on the new lines will start in 2027 and 2028. The plant represents a $497 million investment.

 

ALABAMA

Auto supplier DAS North America expands in Montgomery, Ala. 

The Montgomery Regional Chamber held a press conference at the end of February to present new economic data and to announce a “major” industry expansion. An automotive supplier, DAS North America, announced a $77.6 million expansion in Montgomery that will bring 100 new jobs to the city.

 

GEORGIA

Toyota Financial Services to establish new service center in Alpharetta, Ga., and create 150 Jobs

Toyota Financial Services will open a new office in Alpharetta to become the company’s East Dealer Service Center. The investment of more than $8 million will bring 150 new jobs to Fulton County.

 

KENTUCKY

Ford splits with SK On, to repurpose plant in Kentucky

Ford is repurposing its BlueOval SK battery plant in Glendale, Ky., by ending EV battery production, laying off around 1,500 workers (layoffs began in February), and investing $2 billion to produce large-scale Battery Energy Storage Systems for utility customers, data centers and the power grid, shifting focus from just EVs to broader energy solutions. The plant, now fully Ford-owned after the SK On split, will focus on grid-scale batteries, while Ford also supports impacted employees and plans to add 2,100 jobs long-term as it transitions. 

 

Toyota to build new electric SUV Highlander in Kentucky

According to the Louisville Courier Journal, Toyota will produce the all-electric 2027 Highlander three-row SUV at its Georgetown, Ky. plant, marking a major US-based EV expansion. Backed by a $1.3 billion investment, production begins this fall, with the vehicle featuring a 300- to 320-mile range, available AWD, and seating for six to seven passengers. 

 

Toyota Boshoku America opens new Kentucky plant

Gov. Andy Beshear joined local officials and leadership at Toyota Boshoku America (TBA) to celebrate the grand opening of the company’s new, state-of-the-art $225 million facility in Hopkinsville, creating 157 full-time jobs. The new facility, located on nearly 50 acres in Christian County, is officially TBA’s first “smart plant,” implementing technologies to create a more efficient and environmentally responsible operation. Last month, the facility began production of seat frame mechanism parts such as seat tracks, seat recliners and motors with gear.

 

NORTH CAROLINA

Another delayed EV battery maker plant; this one in North Carolina

Epsilon Advanced Materials EV battery materials plant planned for Brunswick County, N.C., has been delayed. About half of the EV battery assembly plants announced from 2021 to 2024 have been delayed in the Southern Automotive Corridor as of the end of 2025, and two have closed before they opened. 

 

Joe Gibbs Racing sells manufacturing division; new owner to expand

Joe Gibbs Racing has sold its manufacturing business to a private equity firm that plans to pump more than $25 million into expanding the operation and creating dozens of new jobs in the Charlotte area.

 

SOUTH CAROLINA

Scout Motors delays EV launch at South Carolina plant

Scout Motors is facing reports of delaying its electric vehicle launch from 2027 to 2028 due to technical challenges and software integration issues, according to German media. While some reports claim the delay is official, Scout maintains it is still on track for initial production and validation in 2026/2027. The impact on its Charlotte, N.C. headquarters, which is currently in development, remains unclear, although the company continues its expansion. The Scout project is part of Germany’s Volkswagen. 

 

Nice automotive deal captured in Orangeburg County

SODECIA AAPICO Joint Venture (Sodecia Aapico JV) announced in the winter it has chosen Orangeburg County to establish its first South Carolina operation to support Scout Motors. The company’s $120 million investment will create up to 392 new jobs. SODECIA and AAPICO — both family-owned, global automotive manufacturers — are combining to manufacture advanced ladder frames for Scout Motors. Scout is building its new assembly plant near Columbia and chose Charlotte, N.C. for its new headquarters and 1,200 jobs recently as well. 

 

TENNESSEE

Ford is scrapping plans to make a next-generation electric pickup truck north of Memphis 

Ford announced in December it will convert the facility to gas-powered truck assembly, rename the plant and ditch the former SK On partnership, which has also been scrapped at the renamed Tennessee Truck Plant, formerly called BlueOval City. Ford has operated the Kentucky Truck Plant in Louisville for decades. When Ford announced the plant in 2021, it promised 5,760 new jobs in exchange for nearly $1 billion in Tennessee state incentives. About 3,000 workers were expected to work the Ford electric pickup line. By converting the plant to combustible engines, Ford announced it will employ 2,300 to produce the gas-powered F-150 model and SK On stated the start of the battery plant remains flexible. 

 

South Korean aluminum giant ALUKO Group creating jobs in Lauderdale County

The $107 million project is the second for ALUKO in the U.S. and focuses on aluminum production for electric vehicles and solar products, and promises to create 285 new jobs in the West Tennessee county. The first ALUKO
deal was announced for nearby Jackson, Tenn. 

 

Another big deal captured by Clarksville, Tenn. 

T.RAD will create 928 new jobs and invest $90.2 million in Montgomery County as the company constructs a new facility at the Clarksville-Montgomery County Corporate Business Park South. T.RAD was founded in 1936 as a radiator manufacturer in Kawasaki, Japan, and today has grown into a global corporation, operating across four continents.

 

UAW reaches agreement with Volkswagen Chattanooga plant

From the UAW report: Autoworkers at Volkswagen’s Chattanooga plant have won a historic tentative agreement with the company. After making history as the first Southern autoworkers outside the Big Three to join the UAW, the 3,200 workers at Volkswagen Chattanooga have won a tentative contract deal that provides 20 percent across-the-board wage increases, affordable health care, real job security and more.

 

TEXAS

Austin-based Tesla to create 1,500 jobs in Waller County

EV maker Tesla is actively hiring for its $200 million manufacturing facility in Brookshire, Texas. According to the company’s tax abatement agreement, the new plant must house 750 workers by the end of 2027, and 1,500 by the end of 2028.