THE investment surge by both new and established automakers in the electric vehicle (EV) market is a bonanza for factory equipment manufacturers that supply the highly automated picks and shovels for the prospectors in the EV gold rush.

The good times for the makers of robots and other factory equipment reflect the broader recovery in U.S. manufacturing. After falling to US$361.8 million in April 2020, new orders surged to almost US$506 million in June, according to the U.S. Census Bureau.

New EV factories, funded by investors who have snapped up newly public shares in companies such as EV startup Lucid Group Inc. are boosting demand.

“I’m not sure it’s reached its climax yet. There’s still more to go,” Andrew Lloyd, electromobility segment leader at Stellantis-owned supplier Comau, said in an interview. “Over the next 18 to 24 months, there’s going to be a significant demand coming our way.”

Growth in the EV sector, propelled by the success of Tesla Inc, comes on top of the normal work manufacturing equipment makers do to support production of gasoline-powered vehicles.

Automakers will invest over US$37 billion in North American plants from 2019 to 2025, with 15 of 17 new plants in the United States, according to LMC Automotive. Over 77 percent of that spending will be directed at SUV or EV projects.

Equipment providers are in no rush to add to their nearly full capacity.

“There’s a natural point where we will say ‘No’” to new business, said Comau’s Lloyd.

For just one area of a factory, like a paint shop or a body shop, an automaker can easily spend US$200 million to US$300 million, industry officials said.

“This industry is the Wild, Wild West right now,” said John Kacsur, vice president of the automotive and tire segment for Rockwell Automation. “There is a mad race to get these new EV variants to market.”

Automakers have signed agreements for suppliers to build equipment for 37 EVs between this year and 2023 in North America, according to industry consultant Laurie Harbor. That excludes all the work being done for gasoline-powered vehicles.

(SD-Agencies)