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.