Automakers Set to Invest $1.2 Trillion in EVs by 2030

The auto industry will invest $1.2 trillion to drive the shift from internal combustion to battery-electric drive technology through the end of the decade.

A new study shows that automakers will spend about $1.2 trillion on electric vehicle production and development by 2030.

The figure released by Reuters marks a substantial increase in earlier estimates, doubling the figure the wire service published just a year ago. put the latest numbers at “around $1 trillion” in recent articles.

Industry analysts said the figures could continue to increase as the industry comes to accept that gas and diesel technology is fading out in favor of battery-electric and other zero-emissions alternatives. Toyota, for one, is in the midst of an internal review that could see the automaker accelerate its shift to EVs, forcing higher spending levels.

Automakers accelerate product launches

The rapid rise in EV spending reflects a variety of different factors, industry insiders told This starts with a rapid acceleration in the number of all-electric models coming to market through 2030. General Motors, for example, has confirmed plans for 30 EVs by mid-decade. But insiders have indicated it may up that number. It is reportedly looking to add a midsize Hummer EV, Bloomberg reported this week, on top of the full-size Hummer pickup and SUV models so far publicly confirmed.

There were approximately 15 “long-range” battery-electric vehicles available in the U.S. at the end of the 2021 model year. By the end of calendar year 2022, that is expected to reach around 50, based on various studies. The number is forecast to run as high as 150 by late 2024, reported Guidehouse Insights and others. And the global figures are running several times as high. There are dozens of unique EVs available only in China, the world’s largest market for battery-electric vehicles, such as the new Toyota bZ3 unveiled this week.

The Orion (Michigan) plant builds the Bolt and Bolt EUV.

Charging forward with new battery plants

The rapid increase also reflects spending on battery research and production. Globally, Reuters said, “automakers and their battery partners plan to install 5.8 terawatt-hours worth of battery production capacity by the end of the decade.”

In the U.S. alone, production of lithium-ion batteries are expected to jump from a mere 40 gigawatt-hours in 2021 to around 500 gWh by mid-decade, according to Guidehouse Insights, and top 1 tWh by 2030.

Automakers and their suppliers have also upped spending on technologies meant to simplify EV production — a move manufacturers expect to pay off by lowering costs and improving profit margins. Tesla, for example, has adopted a large-scale casting system that helps it eliminate dozens of individual platform parts that traditionally have had to be assembled and welded together. The payoff was apparent, analysts noted, in the upstart automaker’s strong third-quarter earnings.

Automakers lay out aggressive plans

Rivian began producing vehicles at the end of 2021, putting out a few thousand R1 series vehicles.

Tesla has outlined one of the industry’s most aggressive expansion plans — though it has not laid out a specific spending target. It hopes to be producing 20 million EVs worldwide by 2030, noted Reuters, a figure that would include not only its current line-up but new offerings such as the Cybertruck pickup and more affordable models set to slot in below the current Models 3 and Y.

Volkswagen has laid out the most aggressive spending plan formally announced by any automaker, with the German giant now expecting to invest more than $100 billion to go electric this decade. And that figure is expected to increase. Porsche advised potential investors in its recent IPO that a sizable chunk of the funding raised will go towards its shift to electric propulsion. The brand currently offers one EV, the Taycan, but has confirmed that an assortment of other models will follow, including versions of the Macan crossover and Boxster and Cayman sports cars.

Toyota has outlined a $70 billion electrification program, though the automaker plans to develop a mix of conventional and plug-in hybrids, as well as pure electric models and hydrogen fuel-cell vehicles. But facing criticism for its resistance to going pure EV, Toyota has quietly launched an internal review of that strategy. That could see it add even more all-electric models to the 30 it announced during a presentation by CEO Akio Toyoda last December.

BlueOval City

Structural steel is erected less than one year after Ford and SK On announced their $5.6 billion investment at BlueOval City.

Ford a year ago announced plans for BlueOval City, a mega-manufacturing site near Memphis that will focus solely on battery-electric vehicles. Along with other projects, it expects to spend at least $50 billion to electrify.

That includes not only assembly operations but battery plants. There will be two built in Kentucky, and another at BlueOval City. Ford is also investing in battery recycling, a project it believes will reduce its future needs for raw materials like lithium, nickel and cobalt.

Mercedes is rapidly ramping up its own EV program which is expected to cost $47 billion this decade. It launched its first long-range model, the EQS sedan, a year ago. It’s now adding an SUV version, as well as a variety of additional models.

More automakers ready to go all-electric

A growing number of manufacturers, as well as individual brands, have outlined goals of going 100% electric. Volvo will debut its new EX90 next month, the flagship of its plan to abandon internal combustion technology by 2028. Its Chinese parent Geely is itself investing tens of billions in electrification.

BMW’s big gamble in the U.S. paid off as it has produced more than 5 million vehicles at the South Carolina plant.

General Motors has laid out its own goal of going pure electric by 2035. The transition will see it invest $35 billion by the middle of this decade in new products, assembly facilities and battery production operations. In September, GM began operations at a new battery plant near Lordstown, Ohio, one of four it has so far announced as part of an alliance with South Korea’s LG Chem.

BMW has similarly outlined a $35 billion spending program, though recent changes in its strategy are expected to see that number continue to rise.

Other manufacturers expected to continue boosting EV spending also include the Renault-Nissan-Mitsubishi Alliance and Euro-American automaker Stellantis. Honda has also been increasing its spending targets as it further develops a series of EV partnerships with both GM and tech giant Sony.

Challenges ahead

There are still a variety of factors that could lead to significant changes in spending plans. These include ongoing efforts to develop next-generation batteries, such as solid-state, which could yield substantial improvements in range, performance and charging, even while driving down production costs.

But manufacturers also are being forced to cope with rising raw material prices as they compete against one another for supplies of critical compounds such as lithium, nickel and cobalt.

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