As EV sales rise, manufacturing plants are following suit

Updated

EV with a battery above it linking to various states in the US
As electric vehicles become more popular, car manufacturers are expanding their operations within the United States to meet demand.

From 2020 to 2022, the world has learned some hard lessons on supply chain management, with factories across the world shutting down and ports being closed to shipments. Many industries are building factories closer to home to help mitigate future supply chain risk.

The automotive industry is no exception, especially as the demand for electric cars continues to skyrocket. Electric vehicles are becoming more popular, with over 200,000 sold in the first quarter of 2022 alone. It's expected that by 2035, nearly half of all new car sales will be electric in the U.S.

As such, car manufacturers are prepping for the ever-growing demand for EVs by building battery manufacturing plants throughout the U.S.

Which manufacturers are expanding within the U.S.?

All in all, 13 car manufacturers have announced plans to expand or build plants within the United States, including Toyota, Ford, and Nissan. Most recently, Hyundai revealed plans to build its first EV-only plant in the U.S. Located outside of Savannah, Georgia, Hyundai is expecting the facility to be ready for operation in 2025 with hopes to build 300,000 EVs per year.

Companies that already have domestic manufacturing are looking to expand as well. GM is adding its third plant in the U.S. and Tesla recently announced a new location in Austin, Texas. In total, global car makers plan to spend $515 billion by 2030 to build more EVs, and subsequently, manufacturing plants to build those EVs. It's expected that there will be 100 EV models to choose from by 2025, thanks in large part to these plans outlined by manufacturers.

Why are there so few EV plants within the United States?

In the past, factories moved overseas because it was cheaper to manufacture products with lower-wage workers and ship products to the States or continue to manufacture in already established automotive factories, rather than pay U.S. workers a living wage for the same job. Currently, most EVs are made in either China or Europe.

Shifting to a global supply chain did lead to numerous international opportunities and tons of innovation, but it did come at a cost. Cities throughout the U.S., specifically within the rest blet, deteriorated as manufacturing moved abroad.

Not to mention, the global supply chain is very susceptible to supply chain disruptions. These bottlenecks were exacerbated during the COVID-19 pandemic and served as a wake-up call for companies, especially car manufacturers.

What makes the U.S. an attractive investment for manufacturers?

The U.S. is an attractive place to invest in infrastructure for its proximity to a large market and a stable environment for businesses to operate, which can help prevent some of those supply chain issues we mentioned earlier.

Although an American-first mentality can sometimes hinder our ability to remain competitive, expanding manufacturing within the United States while continuing to maintain global plants can enforce car manufacturers' supply.

There are other incentives enticing manufacturers to move to U.S. soil. President Biden recently invoked the Defense Production Act to increase the U.S. supply of key minerals for EVs and renewable energy, among other things. Lithium mined in the U.S. and utilized at manufacturing plants located within the country ensure a supply chain that provides stable access to necessary raw materials.

This doesn't just make lithium more accessible, it also makes jobs more widely available. Expanding electric vehicle manufacturing within the United States will have an immediate impact on adding well-paid American jobs, potentially revitalizing cities that suffered as manufacturing was outsourced.

Mostly though, EV manufacturing is expanding within the United States to keep pace with the exploding demand for EVs. Electric vehicle purchases were already on the rise over the 2020s but the 2022 rise in gas prices that are stemming from far-off wars and corporate greed have driven a large push in pre-orders and purchases of EVs as consumers look to save money on transportation.

The future is EVs and companies are investing in them

The best-case scenario for the environment is for no one to drive a car, but American suburbs were built to cater to the automobile. So, EVs are the next best thing, not only for the planet but also for your wallet. EV owners eliminate unpredictable gas expenses and can charge for even less when they take the next step and go solar.

In the United States, EV incentives are working their way towards being expanded and money is being dedicated to increasing EV charging locations to make EV ownership more practical. Europe is considering ending sales of fossil fuel cars altogether, and while it is unlikely that the U.S. will do the same, EV models might one day eclipse combustion engine models. When they do, car manufacturers will be ready.

Find out how much you can save by charging your EV with solar panels
 - Author of Solar Reviews

Ana Almerini

Web Content Specialist

Ana is a content specialist at SolarReviews. She uses her experience in marketing and knowledge from her master's in climate communications to research and review the solar industry.

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