German Powertrain Supplier Vitesco Technologies Plans to Open New U.S. Plant

German powertrain supplier Vitesco Technologies announced its plans to open a new plant in the United States in order to meet the increasing demand for its electrification products. Sandy Stojkovski, the North American CEO of Vitesco, stated that the company is currently evaluating potential locations for the new factory and expects to make a final decision within the next few months. The plant is projected to be operational by approximately 2026.

Meeting Surging Demand for Electrification Products

Vitesco aims to establish a plant similar in size to its existing facility in Seguin, Texas, which employs around 1,700 individuals and generates approximately $1 billion in annual sales. The new plant will enable Vitesco to keep up with the increasing demand for electrification-related products in the region. In 2022, the company’s global electrification sales reached €1.1 billion ($1.17 billion), and it anticipates that figure to rise to €5 billion by 2026.

Challenges and Considerations in Choosing the Plant’s Location

Stojkovski acknowledged that the company is considering various locations, including metro Detroit and Michigan as a whole. The decision-making process involves evaluating state and local incentives, as well as federal incentives under the Inflation Reduction Act. Other factors include access to renewable energy sources and skilled labor.

Flexibility in Production and Uncertainty in the Electrification Market

Vitesco CEO Andreas Wolf emphasized the company’s flexibility in scaling up production at the new plant. Due to the modular approach of their products, they can balance any fluctuations in customer demand without significant disruptions to their production line. The decision to invest in the new plant comes amidst uncertainty regarding the pace of electrification and the growth of electric vehicle sales, particularly in North America.

Expanding Presence in North America

Vitesco currently employs approximately 7,300 people across its North American locations in Michigan, Texas, Illinois, and New Mexico, as well as in Canada and Mexico. The North American business accounts for about a quarter of the company’s annual revenue.

About Vitesco Technologies

Vitesco Technologies spun off from Continental AG in 2021 and is ranked No. 31 on the Automotive News list of the top global suppliers. In 2022, the company recorded worldwide sales to automakers amounting to $9.68 billion.