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EV Revolution Creates Massive Need for New Auto Production Facilities

Automakers are vying to rule the industry’s EV era — and they need factories to do it!

2022 Auto/Aero Site Guide
Ford is investing $11.4 billion into two EV projects comprising a production complex in Tennessee — BlueOval City — and two battery plants in Kentucky — BlueOval SK.
Ford is investing $11.4 billion into two EV projects comprising a production complex in Tennessee — BlueOval City — and two battery plants in Kentucky — BlueOval SK.
The race is on to lead the auto industry’s electric vehicle (EV) transformation. Today, Tesla holds a sizable lead in production capability, technology, and market share, but legacy manufacturers like Ford, Volkswagen, and General Motors are gaining ground with aggressive efforts to prepare for mass production of new EV models.

According to the International Energy Agency, global EV sales could reach 200 million by 2030, up from just 10 million a decade earlier. The future of the industry is being decided now, and stakeholders everywhere are investing accordingly, from manufacturers and their suppliers to government agencies and environmental organizations.

“This is our moment — our biggest investment ever — to help build a better future for America,” says Jim Farley, Ford president and CEO, of current landmark EV projects that will annually produce 129 gigawatt hours of battery power.

“The world is changing very, very fast,” says Volkswagen CEO Herbert Diess. “Eighty-plus years’ success in auto manufacturing and design is not sufficient for the future.”

Building for the Future
This seismic shift in auto manufacturing requires an equally massive change in the industry’s production facilities. The processes and technologies that drive manufacturing for electric vehicles differ vastly from those for vehicles powered by fossil fuels. Assembly lines fine-tuned to mass produce components such as internal combustion engines, exhaust manifolds, and fuel pumps must be completely reinvented in the face of this change. As such, manufacturers all over the world are investing billions in state-of-the-art facilities equipped with new processes and production equipment that can power the new wave of automobile manufacturing.

Manufacturers all over the world are investing billions in state-of-the-art facilities equipped with new processes and production equipment that can power the new wave of automobile manufacturing. “It has never been more crucial for automotive manufacturers to find a trusted partner with the experience to deliver the facilities and speed to market they need to maintain a competitive advantage,” says Marcus Taylor, vice president of business development at Gray, a fully integrated service provider specializing in engineering, design, construction, digital, equipment manufacturing, and real estate services, and a known automotive industry partner for half a century.

The need to build new facilities extends to suppliers as well, particularly battery producers. The lithium-ion batteries that EVs require are primarily sourced from China and a handful of other countries. Western markets worry that an overreliance on China for the supply of critical materials will throttle economic growth by straining companies’ ability to meet demand.

In response, American automakers are increasingly looking to partner with or acquire companies that can integrate with operations at their newly planned stateside facilities. As the battery market continues to grow at a record pace, the integration of co-located suppliers and manufacturers will be vital to companies’ strategies to quickly scale production.

Paving the Way for an EV Nation
The EV boom is in part driven by new government standards and regulations that call for greater investment in sustainable transportation methods. Foreign initiatives such as the European Green Deal and South Korea’s pledge to offer subsidies and lower EV costs for consumers represent a more progressive approach, but the U.S. is now taking steps to adapt industry and infrastructure in response to economic challenges, supply chain disruptions and overreliance, and a looming climate crisis. The Biden administration’s $1 trillion infrastructure plan earmarks $174 billion for EVs, calling for a range of changes:
  • New infrastructure, such as a nationwide network of 500,000 charging stations
  • Target share of “50 percent electric” for all new vehicle sales
  • Consumer incentives including a tax credit of up to $7,500 for the purchase of a new EV
It’s not just newer, all-electric companies like Tesla and Rivian that are keen to lead the EV charge. One after another, legacy automakers are announcing their visions for the future — one that puts electric vehicles front and center and leaves fossil fuels and the internal combustion engine in the dust. To get there, they’re committing record-setting resources to build the facilities that will turn technology’s promises into tangible products.

Preparing for a Surge in Demand
The electric vehicle as a concept is nothing new, but as battery technology makes rapid advances in power, longevity, and efficiency, EVs are increasingly affordable and offer longer-term cost savings — especially in the face of record-high prices at the pump. Historically in America, one of the main arguments against buying an EV was that the country’s relatively low cost of gas did not produce sufficient long-term savings to justify an EV’s high upfront costs. Ironically, it is the cost of fuel that is now causing many to reconsider going electric.

The EV boom is in part driven by new government standards and regulations that call for greater investment in sustainable transportation methods. Though EVs only made up roughly 9 percent of global auto sales in 2021, new EV sales have nearly doubled each of the last two years, a rate that far exceeds the growth of gas and diesel vehicle sales. Auto manufacturers are building their long-term forecasts and product offerings accordingly:
  • Hyundai aims to produce 1.87 million EVs annually and own a 7 percent market share by 2030.
  • Honda looks to surpass production of 2 million EVs by 2030, with 750,000–800,000 units each for North America and China and 400,000–500,000 for Japan and other markets.
  • Toyota announced it will invest $70 billion to manufacture 3.5 million EVs per year by 2030.
  • GM plans to increase annual EV sales from 25,000 in 2021 to more than one million by 2026.
The Industry Goes All-In
Legacy makers acknowledge that a failure to update their business models would spell disaster. Volkswagen has committed to invest a staggering $100 billion in the development and production of EV technology through 2025, a clear-eyed appraisal that the company’s future hinges on becoming a leader in the EV market.

Among the recent leaders in turning EV ambitions into full-scale reality is Ford, which is investing $11.4 billion into two EV projects that will bring nearly 11,000 jobs to America’s heartland. The joint venture with SK Innovation, a South Korean electronics company and the world’s No. 6 battery-maker, will bring an integrated production complex to Stanton, Tenn., and co-located battery plants to Glendale, Ky. The projects, dubbed BlueOval City and BlueOval SK, respectively, are currently in development and represent the largest investment in the company’s 118-year history. Walbridge will build the integrated battery plant and vehicle assembly factory in Tennessee, while a partnership between Barton Malow and Gray will build twin battery plants at the Kentucky location. Both locations will begin production in 2025.

As battery technology makes rapid advances in power, longevity, and efficiency, EVs are increasingly affordable and offer longer-term cost savings. “This once-in-a-generation investment will create thousands of high-quality jobs and support America’s transition to electric vehicles,” says Lisa Drake, Ford North America chief operating officer.

Other major players in the industry are busy with their own landmark projects:

Recently, the Hyundai Motor Group announced plans to build a $5.5 billion EV manufacturing facility near Savannah, Ga., that will begin production in 2025 and supply 300,000 vehicles per year. This comes on the heels of the state offering $1.5 billion in tax incentives to win Rivian’s commitment to build a $5 billion production plant east of Atlanta that will manufacture up to 400,000 vehicles each year. Announced just months apart, each facility was described at the time by Georgia officials as the state’s largest-ever economic development project — a fact which underscores the scale and pace at which industry stakeholders are working to fully leverage the transition to electric vehicles.

In North Carolina, Toyota plans to build a nearly $1.3 billion EV facility that will create 1,750 new jobs. In Michigan, General Motors is investing more than $4 billion to convert its Orion factory to an EV plant. As was the case with GM’s Detroit plant conversion, the Orion factory will be completely retrofitted, with new process equipment, automated guided vehicles (AGVs), and a battery pack assembly line replacing existing process lines.

The Time Is Now
As companies across the auto industry rush to assemble the resources to boost EV production, it is critical that they secure strong partners who are proven to bring large-scale operations online under aggressive schedules.

“A new kind of product demands a new kind of facility,” says Gray’s Taylor. “Contractors, suppliers, and vendors play a key role in developing next-gen manufacturing, and the time to act is now.”

With abundant opportunities and ample investments, auto manufacturing is on the cusp of its EV transformation. Which industry players come out on top and which fade away will be measured not in decades, but by the few short years already on the horizon.

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