Human geography and the changing auto industry

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Dr. James Rubenstein
Factory with cars being build my machines

Human geography is the scientific study of where people and activities are found across Earth’s surface and the reasons why they are found there. A prominent feature on Earth’s surface is the presence of around 1.5 billion motor vehicles; around 85 million new motor vehicles are produced and sold annually worldwide. Around three-fourths of motor vehicles are produced and sold in only three regions of the world: Europe, North America, and China. The rest of the world accounts for around three-fourths of the global population but only around one-fourth of global vehicle production and sales.

Share of motor vehicle sales. Europe, North America, and three countries in East Asia account for more than 90 percent of world vehicles sales.

Human geographers observe that the global distribution of the factories producing motor vehicles closely resembles the global distribution of the customers for those vehicles. A motor vehicle is a bulky and fragile object that is expensive to ship long distances, so carmakers seek locations for their factories that minimize transporting finished vehicles to their markets, which are dealerships that in turn sell the vehicles to individual customers. Most vehicles sold in North America are manufactured in a north-south corridor known as auto alley that stretches 1,600 kilometers (1,000 miles) between southwestern Ontario and the Gulf of Mexico. Carmakers located most of their final assembly plants producing gas-powered vehicles in auto alley in order to minimize the cost of shipping them to consumers throughout North America either by truck or by train. A secondary production center exists in central Mexico, aided by good train connections to the United States. Most parts makers in turn locate near their customers, which are the final assembly plants.

Motor vehicle production by country. China and the United States are the two leading producers of motor vehicles.

Concern for the impacts on climate change from burning fossil fuels is generating a shift from gas-powered vehicles to electric-powered ones. Human geographers ask if the new technology will alter the spatial distribution of vehicle production. The evidence thus far is mixed. The three areas of North America, Europe, and China account for around 95 percent of the world’s electric vehicle production, compared with only 65 percent of gas-powered vehicle production. China produces and sells around 60 percent of the world’s electric vehicles, and Europe and North America account for all but a handful of the rest of the remainder. On the other hand, Japan, India, and South Korea together produce around 20 percent of the world’s gas-powered vehicles but account for less than 5 percent of the world’s electric vehicle production and sales.

China and Europe have made much stronger commitments than have Japan, India, and South Korea to converting their motor vehicles from gas to electric power in the years ahead. Subsidies are offered to manufacturers to buyers of electric vehicles, while the sale of gas-powered vehicles is being phased out. In North America, Canada and the United States also offer subsidies to manufacturers and buyers of electric vehicles, and U.S. states in the west and east coasts are phasing out the sale of gas-powered vehicles. On the other hand, the other leading vehicle-producing countries of Japan, India, and South Korea are not subsidizing electric-vehicle production or a phase-out of gas-powered vehicles.

Within North America, the change from gas-powered to electric vehicles is altering the geography of production in some ways and not in other ways. In the first years of production, most electric vehicles have been assembled outside of auto alley. Tesla, the early leader in electric vehicle production, has located its assembly plants in California, Texas, and Mexico, rather than in auto alley. California has been a logical location for Tesla’s first assembly plant, because more than one-third of all U.S. electric vehicles have been sold to Californians. However, as other carmakers play catchup with Tesla, they are converting their assembly plants in auto alley from producing gas-powered vehicles to producing electric vehicles.

Auto alley has also been the home of nearly all gasoline engine plants, as well as gas-powered vehicle assembly plants. Engines are big bulky expensive products that carmakers prefer to manufacture as close as possible to where they need to be used, namely the final assembly plants. While assembly plants can be converted from gas-powered vehicle production to electric vehicle production, it is difficult to convert factories making gas engines to factories making batteries for electric vehicles. So new factories are under construction to manufacture the batteries, while production declines at the engine plants. The number of battery plants in North America is expected to increase from around 5 now to around 25 by the end of the decade.

Where will these many new battery plants be located? The answer should be predictable. If most electric vehicles will be assembled in auto alley, then similarly most batteries will be manufactured in auto alley as well. Thus, the electric vehicle revolution is on balance altering the geography of motor vehicle production, but not revolutionizing it. China, Europe, and North America are moving ahead of other vehicle-producing countries in electric vehicle production, but within North America auto alley will continue to be the home of most vehicle production.