The U.S. is entering the biggest auto plant construction boom in decades with the global rise of electric vehicles. Atlas Public Policy, a U.S. automotive research think tank, has released a set of figures showing that announced investments in electric vehicle plants, battery factories and battery recycling projects in the U.S. to date have totaled more than $128 billion, with more than $73 billion in planned projects officially announced for the year 2022 , more than triple the amount for 2021.
About two-thirds of the new automotive investment announced in the U.S. over the past two years has gone to the Southeast region of the country. This has also taken U.S. auto industry activity away from the Great Lakes region which is the traditional home of the auto industry. These areas, where new electric vehicle projects are concentrated, have earned the nickname “battery belt”. These plants will create more than 150,000 direct jobs, according to Tom Taylor, an analyst with Atlas.
Behind these massive investments is the passage of the U.S. climate bills in 2022. These bills plan to spend tens of billions of dollars to subsidize electric vehicles, battery plants and projects to process battery materials such as lithium and graphite.
These investments also represent the auto industry’s bets on the electrification transition. According to consulting firm AlixPartners, the global automotive industry plans to spend a total of $526 billion on electric vehicles by 2026.
While investment in the electric vehicle industry is in full swing, the shadow of recession is looming over the U.S. Massive layoffs in the tech industry have been going on for months. In fact, there have been layoffs within the auto industry, and Stellantis said last month that the company will idle indefinitely in February of this year in Illinois to produce a Jeep Cherokee (Jeep Cherokee) assembly plant, which has 1,350 employees.
However, some auto executives say they believe that even with a potential short-term downturn, these investments will fuel their future growth in the long run.
Lawler said that despite concerns about the recession, auto companies can’t be short-sighted when it comes to electric vehicle-related investments. Ford has several plant projects underway, including those in Tennessee and Kentucky, while it plans to invest $50 billion in electric vehicles by 2026.