Dive Brief:
- Magna International will spend more than $500 million to build two manufacturing facilities and expand a third as it looks to grow its EV component production capacity, the company announced last month.
- All three investments are in Michigan, adding to the auto supplier’s 32 sites in the state. The company is focusing its plans in the Southeast region, expanding steel battery enclosure production at its St. Clair plant and constructing a powertrain facility in Shelby Township and a seating factory in Detroit.
- Operations at the powertrain site are expected to begin in March 2023, while the St. Clair expansion is slated to start production in Q4 2023. Magna did not provide a public timeline for the Detroit factory.
Dive Insight:
The move by major contract manufacturers to increase EV-related production capacity comes as more of their OEM customers expand their U.S. vehicle and battery part operations to qualify for federal tax incentives under the Inflation Reduction Act of 2022.
Last month, competitor Bosch launched EV motor production at one of its South Carolina plants, and simultaneously announced plans for expansion to meet growing demand. The German auto supplier said it chose its location based on proximity to its customers and existing supplier network – a tactic Magna also seems to have considered.
Magna’s locations in Michigan put it in close proximity to its largest customer, General Motors, according to the supplier’s 2021 annual report. The automaker is not only headquartered in Michigan, but holds the greatest concentration of its manufacturing sites in the state, with 31 of its 118 domestic facilities.
The 200,000-square-foot powertrain facility will supply battery tray components to a global EV maker, while the 110,000 square-foot seating facility will supply seat frames and foam and trim assembly to a U.S.-based customer, according to the release. The new operations are expected to bring more than 1,500 new jobs to the state.
To help fund its new undertakings, Magna applied for two grants in Shelby Township and Highland Park, as well as an additional funding for its existing St. Clair facility, according to the Michigan Economic Development Corporation. The Michigan Strategic Fund approved a total of $11.7 million in state programs grants to support the three projects on Oct. 25.
