The Agreement between Mexico, the United States and Canada (USMCA) has helped to increase electric vehicle manufacturing capacities in the United States, according to the American Automotive Policy Council (AAPC).

This position was made by the AAPC in a letter sent to the United States Trade Representation (USTR).

Until the third quarter of 2023, some reports estimate that investments in electric vehicles (EVs) reach approximately 41 billion dollars. Of this figure, $35 billion is earmarked for EV batteries and cells, while $6 billion is directed toward zero-emission vehicle manufacturing facilities. In addition, these investments are projected to generate nearly 180,000 jobs.

The AAPC represents the common public policy interests of Fiat Chrysler Automobiles (FCA), Ford Motor Company and General Motors Company.

Electric vehicle manufacturing capacities

U.S. government policies have directed most new investment in North American battery production capacity to the United States. Only a portion of this investment is going to projects in Canada or Mexico. In addition, approximately 90% of the investment in battery production capacity (measured in gigawatt hours per year) will take place in the United States.

For the member companies of the American Automotive Policy Council (AAPC), there are two main reasons why the USMCA is important. First, the USMCA facilitates deep integration of the U.S. automotive sector, which strengthens the domestic, regional and global competitiveness of U.S. automakers and the automotive sector as a whole.

Second, the USMCA offers a greater level of stability, predictability and reliability to the U.S. and North American automotive industry. This stability is critical because of the high capital investment and long supply chains inherent in the automotive industry.

In terms of investment, the capital allocated to the United States has grown significantly since the signing of the T-MEC, especially in battery plants and electric vehicle assembly. Although part of this growth is due to the economic recovery from the Covid-19 pandemic and the Inflation Reduction Act (IRA) of 2022, the role of the USMCA’s automotive rules of origin has also been key to this progress.