State announces first REV Act tax credit to Decatur manufacturer

By Jerry Nowicki

The state on Tuesday announced the award of the first electric vehicle manufacturing-targeted tax incentives made possible by a law signed by Gov. JB Pritzker last year.

The incentives come from the Reimagining Electric Vehicles Act, which passed nearly unanimously and became law in November, and will provide an estimated $2.2 million in value to T/CCI Manufacturing in Decatur.

The REV Act passed two months after the Climate and Equitable Jobs Act which incentivizes EV adoption, driving Pritzker’s vision to make Illinois “the best place in North America to drive and manufacture an electric vehicle.”

T/CCI’s Decatur plant currently manufactures compressors for gasoline-powered cars. The company plans to retool the Decatur facility to produce compressors for EVs with an estimated $20 million investment. Currently, T/CCI makes EV compressors, a part which cools batteries and powers car air conditioning systems, in China and India.

Pritzker and local lawmakers said the manufacturing of EV parts domestically is necessary to work around supply chain issues.

“Thanks to the REV Act, Illinois beat out international competition to bring this deal home,” Pritzker said. “That means new jobs and jobs that would have gone overseas are staying right here.”

T/CCI’s transition will create 50 new jobs, while 103 existing jobs are expected to be retained.

The REV Act’s incentives are targeted to the manufacturers of EVs and their parts, such as compressors. The companies receiving the breaks can receive a state income tax credit of 75 percent or 100 percent of payroll taxes withheld from each new employee and 25 percent or 50 percent for current employees. The law also provides a 10 percent credit for training expenses.

The governor’s office tied the Tuesday announcement to a previously announced plan to provide $15.3 million in state infrastructure funding to Richland Community College and $6 million to the city of Decatur to create an “EV cluster” that includes a training, research and innovation facility in partnership with T/CCI.

“We know that when companies are looking where to locate, talent is what's most important and we want to make sure that when electric vehicle companies are looking to Illinois to either expand or locate a new venture, they should know you won't find a harder working more qualified workforce,” Department of Commerce and Economic Opportunity director Sylvia Garcia said at a news conference Tuesday.

The infrastructure money would go toward a climatic simulation center on T/CCI’s Decatur campus which will allow the testing of new EV-related technologies in extreme environments.

“T/CCI is recognized in the industry as a leader in compressor technology, already having developed a largest range of EV compressors in the market,” Richard Demirjian, TCCI’s president, said in a news release. “We’re excited to use our expertise in innovation and component manufacturing to advance Illinois’ position and create a successful partnership that drives long-lasting economic growth.”

Richland and T/CCI are also working in partnership with the University of Illinois Grainger College of Engineering and Northern Illinois University on a training academy that will focus on EV advanced engineering, software technology and accredited apprenticeship programs.

A public-private partnership model, the climatic center will be open to businesses and researchers looking to expedite adoption of new EV technologies, according to the governor’s office.

“Together we are establishing a new model for Illinois that sets the stage for how education, research and industry work together to cohesively advance us faster, invest in our people and grow our economy,” Richland Community College President Cris Valdez said. “This state-of-the-art facility will provide world class training in electrification, a registered apprenticeship program, along with immersive industry partnerships and testing available to the electric vehicle industry.”

Pritzker said the community college partnership is one he would like to emulate in communities across the state, pointing to a partnership between the EV manufacturer Rivian and Heartland Community College in Normal.