pMany existing plants will provide flexibility across propulsion systems as EV demand and consumer preferences fluctuate./p
As a massive investment wave for electric vehicle assembly plants subsides, the auto industry's manufacturing footprint is unlikely to change much for the rest of this decade, according to an analysis by the Federal Reserve Bank of Chicago.
Automakers will invest in their existing plants through the EV transition. Many of those factories will provide flexibility across propulsion systems as EV demand and consumer preferences fluctuate, the Chicago Fed said in a July analysis based on January S&P Global Mobility data. The industry operated 74 light-vehicle assembly plants in North America in 2023. Through 2028, just one is expected to close so far — a joint venture in Mexico between Mercedes-Benz and Nissan. Seven are expected to open, according to the report.
Automakers are adding flexibility to build vehicles with multiple propulsion systems. The number of plants that will build vehicles with three propulsion systems — internal combustion engine, hybrid and EV — will nearly double from 11 in 2023 to 21 in 2029, according to the report. S&P and the Chicago Fed expect average annual production volume per plant to fall three per cent to about 204,000 vehicles in 2029, compared with about 211,000 in 2023.
About half of EV battery cells were sourced from North America last year, compared with a projection of nearly 90 per cent in 2029. Battery pack plants will be about 280 miles from assembly plants on average.
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