Alabama’s Automotive Industry Going Forward Thanks to Electric Vehicles

Mercedes-Benz Plant in Alabama 6 photos
Photo: Daimler AG
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As the state’s automotive original equipment manufacturers (OEMs) ramp up EV production, starting with Mercedes-Benz next year, Alabama has to ensure the suppliers in the state are in a position to make the transition where possible.
Mercedes-Benz U.S. International (MBUSI) in Tuscaloosa County – investing $1 billion preparing for EV production – is slated to begin building the EQE and EQS SUVs in 2022, alongside SUVs with conventional and plug-in hybrid drives. Part of that investment is the building of a battery plant in Bibb County.

Hyundai is investing $7.4 billion globally to build EVs, including its Hyundai Motor Manufacturing Alabama plant in Montgomery.
Honda also has announced a global plan to be all-electric by 2040 but hasn’t announced specific plans for its Honda Manufacturing of Alabama plant in Lincoln.

“We’ve got five OEMs in the state of Alabama and all five are investing heavily in the future of the electrification of vehicles,” said Alabama Commerce Secretary Greg Canfield. “So, we definitely see it coming. We anticipate it. We’re working with our OEMs and the supply chain each and every day.”

Electric vehicles and charging stations part of Alabama's automotive future from Alabama NewsCenter on Vimeo.

Last month, Alabama Gov. Kay Ivey told economic developers at the Economic Development Association of Alabama summer conference that she wants the state to become more involved in all facets of the EV industry.

“Alabama’s automotive industry is clicking on all cylinders,” she said. “We should be leading the research effort to make Alabama the EV leader.”

Mark Williams, president of Strategic Development Group and a site consultant with expertise in the automotive industry, said while EVs are the wave of the future, it does come with an adjustment as it relates to the hundreds of suppliers and thousands of jobs tied to creating parts of traditional cars and trucks.

“EVs have fewer parts,” Williams told Alabama economic developers last month. “It’s not just a one-for-one trade-off with an internal combustion engine.”

Williams said changing consumer sentiment, increasing government support and enhanced technology are giving way to an acceleration toward EVs. EVs are expected to reach 3% of the U.S. automotive market share in new sales this year. According to some projections, that number is expected to grow to as much as 25% by 2030.

President Joe Biden signed an executive order this month calling for 50% of all new vehicles sold in the U.S. in 2030 to be “zero-emission vehicles,” which could mean battery electric or fuel-cell electric vehicles. Biden’s order aims for an industry standard of 52 miles per gallon for all new vehicles by 2026.
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