Report: Auto Industry Crucial to Economy and Security

TRAVERSE CITY, MI – The Center for Automotive Research (CAR) issues a report outlining the contributions of the U.S. auto industry to the U.S. economy and national security.

Usually, these reports come out when the industry needs governmental support, as was the case in 2008-2010 when the Detroit Three automakers were lobbying the Bush and then Obama administrations for loans and other supports to weather a severe economic downturn. The new report comes while the Biden Admin. has been jacking up tariffs on Chinese EVs to protect the financial stability of U.S. automakers during the transformation from internal-combustion engines to the era of electrification.

Automotive manufacturing in the U.S. generates nearly $100 billion in local, state and federal tax revenue, the report says, as well as 775,000 direct jobs. Across the nation, this industry contributes most greatly to the Midwest, followed by the South, in collected tax revenue.

The jobs picture is changing in the auto industry as companies reset themselves from an employee and industrial base set up over decades to crank out ICE vehicles to a new era of electrification and software-defined vehicles. Automobile and light-duty motor vehicle manufacturing direct employment is estimated at just over 240,000 while motor vehicle parts manufacturing contributes roughly another 535,000 direct jobs. This direct contribution supports total employment of 3,369,000 across the U.S., factoring in both indirect and induced employment effects, says CAR.

“I think that using research and the expertise of CAR to regularly inform the industry, government and the public about the importance and contributions of the auto industry is the right thing to do, rather than wait for a problematic event impacting the whole economy,” says John Bozzella, president and CEO of the Alliance for Automotive Innovation, which recently entered a formal partnership with CAR.

Among the four U.S. geographic regions, the Midwest region has the highest employment levels supported by automotive manufacturing, with roughly 1.5 million jobs supported by the industry within the East North Central division, inclusive of Indiana, Illinois, Michigan, Ohio and Wisconsin. The second largest division in terms of automotive manufacturing supported employment is the East South Central region, consisting of Alabama, Kentucky, Mississippi and Tennessee where foreign-owned car companies and suppliers have set up to avoid union organizing.

CAR, as part of its report, also tracks the latest investments made by and into the auto industry. In 2023, says CAR, $89 billion in new investments were announced. The biggest share of investments are in building new or converting existing plants to produce EVs and battery cells.