If auto factory investments were hobbled in 2020 by COVID-19-related fears and global business uncertainties, 2021 could be called the year when automakers made up for lost time. The auto industry came out of its pandemic doldrums, spending money with a vengeance to create new manufacturing capacity and jockeying for position in electric products.
The past few months have witnessed manufacturing projects on a bold scale, including the largest U.S. investment in electric vehicles at one time by Ford Motor Co.
"Electrification is driving a new wave of auto factory investment," said Terni Fiorelli, assistant director of the Automotive Communities Partnership at the Center for Automotive Research, an organization in Ann Arbor, Mich., that tracks industry investment through its Book of Deals.
"Last year, half of the 10 biggest automaker projects in North America were related to electric vehicles," she said. "This year, all 10 of the top 10 were. And what you're seeing increasingly are the established automakers getting into it, whereas before, a lot of EV investments were coming from new companies."
Automaking investments have always been expensive. But there is a new cost factor today: Automakers aren't merely adding more of what they were producing — more cars, more engines, more transmissions.
They are instead having to create an all-new product spectrum — new EV platforms, with new technologies to power them and new components to assemble them.
At the moment, battery plants are the tail wagging the dog in North American plant investment. Virtually every new assembly line for an EV now requires the construction of new battery capacity. And that isn't cheap. Battery-cell factories have been coming with price tags of more than $1 billion.
Automakers are confident in spending at a higher level now because the market is calling for it, said Tom Stringer, managing director of the real estate consulting firm and site search advisory BDO International.
"This is all market-driven," Stringer told Automotive News last week as he toured the newly completed Nikola Corp. electric truck plant in Coolidge, Ariz., a project on which he consulted. "A lot of money is being spent on capacity right now because that's what consumers are saying they want. The time is right. The economy is strong and the capital is available to make it happen."
Here are the 10 largest automaker projects announced for North America during 2021, by dollar amount, according to the Center for Automotive Research's Book of Deals.
Where: Montgomery, Ala.; West Point, Ga.
Jobs: Unknown
Mission: Create zero-emission vehicles and smart mobility products
The company has not yet specified where or when its mammoth new investment plan will land. But in May, Hyundai Motor Group, including Hyundai Motor Co. and Kia Corp., said it will invest $7.4 billion in the U.S. by 2025 to produce future EVs, enhance production facilities and further its investments in smart mobility solutions.
Hyundai specified that the funds will also cover the creation of hydrogen refueling stations to support its push into hydrogen-powered vehicles, and the development of pilotless flying taxis. Indications are that a large part of the spending will go to expand the footprint of Hyundai's auto complex in Montgomery, Ala., and Kia's in West Point, Ga.
Where: Glendale, Ky.
Jobs: 5,000
Mission: Create an EV battery production center
The 1,500-acre Kentucky project will yield two battery plants to support future Ford and Lincoln EVs, representing 86 gigawatt-hours of annual production capacity. Ford will partner in the investment with SK Innovation, a South Korean energy producer and battery supplier.
Where: Stanton, Tenn.
Jobs: 5,600
Mission: Construct an entire campus for production of EVs and their batteries, with a training center to teach new workers the skills for EV manufacturing
The Tennessee plant will produce a next-generation electric F-Series pickup and 43 GWh of annual battery cell and pack production. According to a statement by Ford, the Tennessee and Kentucky projects together represent the largest single EV industrial investment to date.
Where: Morgan County, Ga.
Jobs: 7,500
Mission: Build electric trucks
Flush with nearly $12 billion in proceeds from its IPO, Rivian plunged into capacity expansion last week, announcing a new $5 billion plant an hour east of Atlanta. The project is envisioned to eventually produce 400,000 EVs a year and employ 7,500.
Where: Spring Hill, Tenn.
Jobs: 1,300
Mission: Supply advanced Ultium batteries to EV production at GM's Spring Hill Manufacturing Plant
The Tennessee Ultium Cells joint venture between GM and LG is the second Ultium plant to be built — the first being just ahead of it in schedule in Lordstown, Ohio. The batteries from the $2.3 billion Spring Hill facility will supply EVs assembled nearby at GM's Spring Hill vehicle plant, such as the Cadillac Lyric.
Where: Liberty, N.C.
Jobs: 1,750
Mission: Produce lithium ion batteries
Toyota Motor North America and supplier partner Toyota Tsusho revealed this month that they will create a large-scale lithium ion battery plant near Greensboro, N.C., to launch in 2025. The project will yield four battery production lines, each having the capacity to make enough batteries to supply 200,000 battery-electric and hybrid vehicles. But Toyota clarified that the project will have the capability of expanding to at least six production lines.
Where: Ramos Arizpe, Coahuila, Mexico
Jobs: Current work force of 5,600
Mission: Retooling to introduce production of EVs, batteries and electric components
GM announced a $1 billion investment to expand its manufacturing plant in Ramos Arizpe to produce electric cars and components starting in 2023. The plant has been building the Chevrolet Blazer and Equinox and their engines. As part of the project, the plant will receive a new paint shop and also be equipped to produce drive units, the propulsion system that drives EVs.
Where: Princeton, Ind.
Jobs: 1,400
Mission: Reconfigure plant to build two new electric SUVs
Toyota said in October that it will retool and expand its Princeton plant, where it produces the Highlander, Highlander Hybrid, all-hybrid Sienna and Sequoia models, in order to introduce two new electrified vehicles by the end of 2023.
Where: Ingersoll, Ontario
Jobs: Current work force of 2,000
Mission: Shift production from crossovers to electric delivery vans
GM moved quickly this year to convert its CAMI Assembly plant, which was scheduled for closure, to serve as the source of its new BrightDrop electric light commercial vehicle, the EV600. CAMI had been producing the Equinox.
Where: Georgetown, Ky.
Jobs: 1,400
Mission: Expand existing plant and enhance powertrain capabilities
The latest project at Toyota's Kentucky plant will expand Georgetown's ability to make new electrified products — including future electrification.
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