Michigan’s renowned auto industry, a longstanding powerhouse, is under pressure to adapt to a rapidly evolving landscape, according to a recent report by MichAuto. The report highlights the challenges posed by southern U.S. states, global competitors like China, and shifts toward electric vehicles (EVs).
Glenn Stevens, executive director of MichAuto and a part of the Detroit Regional Chamber, emphasized in the State of Automobility report released Wednesday that “Michigan cannot expect to win the future of the industry through legacy alone.” He urged the state to devise a “bold, cohesive agenda” to maintain its competitive edge in an industry employing 1.2 million people.
The suggested agenda includes fostering a high-tech workforce, enhancing the business climate, implementing sustainable state incentive programs, and supporting companies transitioning to new technologies. These initiatives are aimed at countering a recent decline in the state’s business climate and ensuring Michigan remains a key player in the auto sector.
Positioned ahead of a crucial gubernatorial election in 2026, the report seeks to influence policymakers. MichAuto plans to gather further insights from industry leaders to develop a comprehensive blueprint, set for release next fall. Stevens highlighted the importance of this initiative, citing challenges such as Chinese competition, artificial intelligence, supply chain transformations, and the shift to EVs.
Michigan boasts significant assets, including a robust research and development infrastructure, 14 testing facilities, established supply chains, and a skilled workforce. However, its dominance is waning. Although it leads in business-funded auto research and development with $17.5 billion annually, its share of total R&D funding has diminished over the past five years.
In vehicle production, Michigan still leads with 2 million cars annually but has seen a 25% decrease over the last two decades, while southern states like Kentucky and Alabama have nearly doubled their output. Georgia has surpassed Michigan in new EV investments since 2020, with $35 billion in announced projects compared to Michigan’s $37 billion, closely followed by North Carolina at $23 billion.
China presents a significant threat, with its vehicle production now triple that of the U.S. Despite not selling domestically yet, Chinese EVs are penetrating markets where Michigan-based brands compete. “Make no mistake about it, everybody wants a piece of (Michigan’s auto industry),” noted Stevens, pointing to the global competition for market share.
The report acknowledges a recent slowdown in EV sales but advises against dismissing their future potential, as battery-powered models continue to gain market share. Since 2020, 76% of Michigan’s auto and mobility investments have been EV and battery-related, creating 16,000 jobs. It warns that failing to compete could cost the state its economic and innovative advantage, especially against China, which produced 70% of the world’s EVs in 2024.
Stevens cautioned against politicizing EVs: “You have to look at the market, and the market and the consumer will drive demand, but make no mistake about it, EVs will continue to grow. They will grow incrementally, and they are proliferating around the world.”
Addressing workforce challenges is essential, the report contends, particularly in training for roles in automation and data analysis. The aging workforce, with one in four manufacturing jobs held by those 55 and older, exacerbates this issue. Education shortfalls, including subpar proficiency in reading and math and low post-high school enrollment, further complicate efforts.
Moreover, a separate study noted in the report reveals a negative perception of the auto industry among Michigan’s youth, with over half expressing disinterest in pursuing careers in the sector. This perception stems from a lack of awareness about diverse career opportunities beyond engineering and manufacturing, unclear educational pathways, and misunderstandings about working conditions.
Original Story at www.detroitnews.com