The electrified vehicle manufacturing landscape in America is changing quickly. No wonder major automotive companies are making huge investments and reversing course on production plans to prepare for this transition. Nick Nigro, the founder of Atlas Public Policy, called out the continuing upward momentum in investments in EV manufacturing. Recent federal policies are having a huge impact on spurring that growth. That was until the Inflation Reduction Act, signed into law by President Joe Biden in 2022, largely drove that growth. It helped spur over half of the record-setting $208.8 billion in announced investments that Atlas has been tracking. By October 2024, three-quarters of these projects were either under construction or already in operation. This change underscores the deepening bipartisan commitment to strengthening the U.S. manufacturing sector.
The U.S. Treasury Department would probably consider that a positive sign—a complete and remarkably strong surge in manufacturing construction spending. When adjusted for inflation, this spending has more than doubled since the end of 2021. This increase is a clear sign of the effectiveness of recent investments passed in bipartisan legislation, focusing on rebuilding domestic manufacturing infrastructure.
Major Investments and Production Shifts
A number of other major automotive companies, including Ford and GM, have made big bets on the U.S. EV market, signaling their belief in the future of electric vehicles. Hyundai, meanwhile, has officially set in motion a bold $21 billion investment plan. This proposal includes a $5.8 billion steel plant located in Louisiana, which would provide raw materials for its electric vehicles. This move is part of larger efforts to create a durable manufacturing infrastructure in the US.
Honda took a significant step in the right direction by and large its decision to produce its next generation Civic hybrid vehicle in Greensburg, Indiana. This decision is a reversal from their original plan to build the electric vehicle in Guanajuato, Mexico. The change will raise annual output at the Indiana plant to 210,000 vehicles. This major development will better position the state to defend and grow its lead in the U.S. automotive industry.
Stellantis made a big splash after announcing a gargantuan $5 billion surprise investment. This new money is expected to assist with the reopening of an assembly plant in Belvidere, Illinois. This plant used to make Jeep Cherokees. Starting in 2027, it will turn the production facility over to building midsize trucks, an obvious adaptation to consumer demand.
Legislative Impact on Manufacturing
The Bipartisan Infrastructure Law and the Inflation Reduction Act have provided federal incentives that significantly contribute to the current wave of investments in U.S. manufacturing. These legislative efforts focus on re-establishing the national manufacturing base and increasing the level of jobs created in the EV supply chain. Atlas Public Policy has tracked announcements of a jaw-dropping $208.8 billion of investments into EV manufacturing from 2000 through September 2024. These capital investments will create up to 240,000 new jobs.
Not all developments have been positive. The Trump White House is at least admitting that the Biden-era investments aren’t working. They cite a recent Financial Times investigation finding that nearly 40% of projects financed since the passage of the Inflation Reduction Act have faced stoppages or slowdowns. Yet, these stopped projects add up to nearly $84 billion in investment dollars that are now just sitting on the sidelines.
Future Outlook and Challenges
Though many of these have suffered setbacks, the combined trajectory is still a positive one for investments in EV manufacturing. The ongoing construction of facilities across various states signals a long-term commitment to building a robust supply chain for electric vehicles. Industry analysts agree that these investments are imperative to keep up with accelerating consumer demand and to help the nation meet its sustainability goals.
Challenges remain as companies continue to adapt amid shifting macroeconomic policies and regulatory frameworks. These challenges run deeper for the automotive industry, which has to juggle short-term production demands with long-term plans for a technological and environmentally friendly transition.
