German powertrain supplier Vitesco Technologies has announced its plans to open a new plant in the United States in order to meet the growing demand for its electrification products. Sandy Stojkovski, the North American CEO of Vitesco, stated that they are currently evaluating potential locations for the factory and expect to make a final decision within the next few months. The goal is to have the plant up and running by approximately 2026.
Vitesco’s vision is to establish a plant that is comparable in size to its facility in Seguin, Texas. The Texas plant, which employs around 1,700 people and generates approximately $1 billion in annual sales, has been successful in meeting the demand for electrification-related products. The new plant in the U.S. will serve to further satisfy rising demand in the region. Vitesco recorded €1.1 billion ($1.17 billion) in global electrification sales in 2022 and anticipates reaching €5 billion by 2026.
During a media roundtable discussion at the Detroit auto show, Stojkovski expressed the challenge faced by Vitesco due to the influx of new business. The company’s sales in the North American region are expected to double, necessitating increased production capacity. However, Vitesco does not currently have sufficient resources to meet this demand.
Vitesco is considering various locations for the new plant, with metro Detroit and Michigan being among the possibilities. Stojkovski emphasized that the decision-making process is complex and involves discussions with multiple states to determine the most compelling options. Several factors will influence the choice of location, such as state and local incentives, federal incentives available under the Inflation Reduction Act, access to renewable energy sources, and the availability of skilled labor.
Stojkovski stressed the importance of finding the right kind of labor, as talent acquisition remains a significant challenge for the company. Vitesco currently employs approximately 7,300 individuals in North America, with locations in Michigan, Texas, Illinois, and New Mexico, as well as Canada and Mexico. The North American business contributes to about a quarter of the company’s annual revenue.
Vitesco’s investment plans come at a time of uncertainty surrounding the pace of electrification and the growth of electric vehicle sales, particularly in North America. Acknowledging this uncertainty, Vitesco CEO Andreas Wolf stated that the company will adopt a flexible approach in scaling up production at the new plant. With a modular product approach, Vitesco can adjust production according to customer demand while maintaining efficiency.
Vitesco Technologies separated from Continental AG in 2021 and currently holds the No. 31 spot on the Automotive News list of the top global suppliers. In 2022, the company achieved worldwide sales to automakers totaling $9.68 billion.
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