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The future of the automotive green supply chain in North America

The US plug-in vehicle (PHEV and BEV) market grew by 55.0% year-on-year to 654 000 units in the first six months of 2023, increasing its share of the total light vehicles (LV) market to 8.5%.

January 2023 Tesla and GM models also became eligible for tax credits under the Inflation-Reduction Act (IRA), and carmakers other than Tesla and GM have announced a number of plans to introduce electric vehicles in areas such as SUVs and pick-ups.

The US government’s policy of excluding electric vehicles powered by Chinese batteries from sales incentive payments has led to a growing trend to develop battery production facilities for electric vehicles in the US, and competition for investment incentives among state governments has also intensified. As a result, the development of production bases for electric vehicles on the scale of 10 million units per year in the entire North American region by 2030 is expected to progress, and a number of electric vehicle-related component production plans have also been announced.

This project clarifies the green (electric parts) supply chain in the North American region and looks at the green supply chain networks of various companies, with a focus on electric parts and materials companies concentrated in the US, Canada and Mexico in line with the rapid increase in the new ZEV market and plans to increase production by 9 million vehicles in North America by 2030. The report outlines the future of the green supply chain and the production and service locations and functions of parts and materials manufacturers in North America, as well as in Japan, Europe, Korea and China.

In the eAxle sector, in order to avoid anti-dumping duties, the number of factories manufacturing motor cores in Canada and Mexico has been increasing since the mid-2000s. Now, an increasing number of Tier 1 component manufacturers are increasing their eAxle production in Mexico as major automakers increase their electric vehicle production capacity in the North American region. Mexico is also expected to see a further concentration of component manufacturers in Mexico as Tesla prepares to produce low-cost BEVs.

The optimisation of the North American green supply chain is required to produce internationally competitive electric vehicles in North America while taking advantage of policy incentives, including the IRA Act and the USMCA, and avoiding regulations and restrictions.
Report identifies the green (electric component) supply chain in the North American region and looks at each company’s green supply chain network.