With an increasingly diversified economy and a gross state product approaching $400bn a year, Arizona, sixth largest and 15th most populous state in the US, is a state that continues to attract new business.  

Transportation, alongside healthcare and government, is one of the largest sectors in the state in terms of both employee numbers and output.  

When it comes to the best place to set up an automotive business, Arizona continues to rise in terms of car sales and the number of dealerships, with an average of $94.6m in sales per dealership as of 2021.  

Considering this automotive-friendly landscape, it is not surprising that companies may consider Arizona as a propitious state for an automotive manufacturing facility.  

Part of the tax incentive landscape in Arizona includes the state supported Quality Jobs Tax Credit. Relating to capital investment, job creation, and wages, the initiative incentivises new or expanding businesses. These tax credits or reductions are geared towards making it more financially viable for companies looking to operate in Arizona.  

Phoenix automotive sector continues to expand and innovate 

As the capital of the state, Phoenix represents an attractive option for potential business start-ups and is the driving force of the state’s economy. 

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With states vying for a slice of the rapidly expanding electric vehicle production market, Arizona has enjoyed some major traction.  

In terms of the automotive industry, the growing demand for electric vehicles demands an increase in US-based production capacity, something this state is taking advantage of.  

In part, the growth is also related to the growth of the self-drive car industry and the attendant technology.  

With Google announcing Phoenix as its next hub for testing and development of its burgeoning fleet of self-driving test cars, fuelled by a newly signed deal with Fiat-Chrysler, the city continues to develop a multifaceted automotive industry.  

Electric vehicle demand driving automotive manufacturing in Arizona 

According to official figures in the US, more than 200,000 fully electric vehicles were sold in the first quarter of 2022. Forecasts are suggesting that by 2035, nearly half of all new car sales in the country will be electric vehicles. 

Global car manufacturers have announced their plans to spend about $515bn on electric vehicle manufacturing by 2030. 

This financial commitment strengthens the market and ensures the need for companies to build additional electric vehicle manufacturing plant operations to fulfil that commitment. 

With four electric vehicles registered in the state for every 1,000 Arizona residents, Arizona is now ranked in seventh in the US when it comes to electric vehicle usage.  

When considering the best place to set up an automotive business, Arizona has emerged as an EV sales and manufacturing hub.  

Companies including Polestar, Rivian, Tesla and Atlis Motor Vehicles have all set up operations in the state, further showcasing the importance of the sector for Arizona.  

Investment in automotive business continues in Pinal County 

With competition from across the US for the best places to set up an automotive business rising, Arizona continues to see significant investment in the sector.  

Based on the state’s favourable business conditions, in part created by tax incentives for new businesses, more companies are setting up shop across the state. 

Having emerged as the US hub of EV manufacturing in the US, Arizona has recently attracted a major automotive investment from Lucid after the completion of its new facility.  

Forecasting the creation of about 2,000 new jobs for the local workforce and a facility that is predicted to generate more than $700m in capital investment by the end of 2022, this is a major boost to the automotive sector in Pinal County and Arizona.  

In addition, Nikola Corp has announced the building of a new automotive manufacturing facility to enhance the company’s capacity in the electric- and hydrogen-powered heavy truck area.  

Based on a production target of more than 20,000 vehicles manufactured per year it is set to become a major US site for the industry.  

Arizona automotive expansion emerging across the state 

In nearby Maricopa County, Electra Meccanica Vehicles Corp is opening its $35m plant, further highlining the state’s status as an automotive manufacturing centre.

This facility alone is creating 500 high-tech, high-value jobs for the local workforce.  

When considering the best place to set up an automotive business, Arizona has become an attractive investment option. Whether tech-based or manufacturing, the industry has found a new home in Arizona, with more investment and growth on the way.  

Manufacturing is an industry that is providing increasing opportunities and investment options in Arizona.

Automotive manufacturers across the state are increasingly embracing and harnessing the power of new technologies that continue to emerge as the future of manufacturing.  

Such advances are being seen increasingly in thriving sectors in Arizona including aerospace and defense, the production of electric and automated vehicles and new medical devices. 

Information from Data and Statistics from Statista, Arizona Chamber of Commerce, US Census Bureau and Arizona Commerce Authority.