On January 20th our country administered a time-honored tradition with the inauguration of President Donald Trump. While the outlook for climate change policies in a Trump Administration is admittedly bleak, it’s less clear what the implications will be for advancing electric vehicle sales and infrastructure development. With the President’s many promises to bring manufacturing back to the United States, is it possible that Michigan and the country could see an increase in electric vehicle production?
In his first week, Trump sat down with the CEOs of the Detroit Three (Ford, General Motors, Fiat Chrysler Automobiles) to discuss his plan to bring back and create new automotive assembly plants in the United States. In order to make these investments possible, the Trump administration suggested eased regulations and corporate tax reforms for the automakers.
But the timing of this new push may be ill-timed, note industry analysts in Automotive News, as auto sales appear to have reached a peak. “The American auto industry last year produced more cars than it ever had before,” said Marina Whitman, a professor of business administration and public policy at the University of Michigan. “The last thing the auto industry needs is more capacity.”
But could there be more production in the U.S.? Data from WardsAuto notes that in 2016 American automakers sold a record of 17.46 million vehicles in the U.S. with 56.1% built in the country. And in his most recent move, President Trump has proposed a new border tax with Mexico.
Interestingly, all three Detroit automakers announced plans before Mr. Trump took office to increase investments in domestic assembly plants. GM will be investing $1 billion in a plan that includes moving parts production from Mexico to Michigan. FCA is investing a similar amount in Michigan and Ohio for the second phase of their industrialization plan.
More recently, Ford announced that it was canceling plans for a new $1.6 billion plant in Mexico and is instead investing $700 million to expand its plant in Flat Rock, MI. The Flat Rock plant will be producing a new, fully electric SUV with a 300-mile range that will launch in 2020. Ford also has announced plans to introduce 13 new electrified vehicles to the global market in the next five years.
While American automakers will have to wait and see how a new Trump Administration's policies will fall out, it's fairly clear that more of its production will need to be located here at home. Whether that means an American manufacturing renaissance that creates new jobs, boosts electric and other advanced vehicle production and sales– while helping the environment in the process– remains to be seen.