The electric vehicle revolution is not underway. From where Kenny Anderson sits, it’s already started.
“There is no stopping it,” said Mr. Anderson, leader of advanced manufacturing operations at DPR Construction, a builder focused on factories like the mammoth battery plants that are driving this change across the industry. “Every couple of weeks, a new multi-billion dollar facility is being built. That’s not something we see every day.”
In an effort to make electric vehicles more affordable, last year’s Inflation Reduction Act included tax credits that give U.S. automakers like General Motors and Tesla an edge over foreign competitors . A total of $135 billion in government funds will go toward electrifying vehicles and new factories.
As they accelerate their shift to electric vehicles, automakers will also need new facilities such as design and development sites. But the industry faces challenges, including rising material costs.
“To win in what we call the automotive end, traditional companies have to fundamentally change, fundamentally now,” said Klaus Stricker, who co-leads the automotive practice at consulting firm Bain & Company, of which is a partner. “We currently see that the industry is going to face a lot of pressure over the next two years.”
Last year, growing demand sent a record $128 billion in investment for electric vehicle manufacturing and battery plants, which require a large footprint. A battery plant can cover 4.5 million square feet, about the size of 25 Walmart supercenters. Projections suggest the country may need 120 or more such plants.
Before these batteries and the cars that use them can be manufactured, they must be conceptualized. Thus, car manufacturers are investing money in research and development facilities.
These spaces, which allow industrial design, research and software engineering teams to work side by side, often have doors configured to allow vehicles to roll inside and ventilate to expel engine exhaust of the oldest internal combustion vehicles that circulate in the interior. They are part of a new generation of innovation centers emerging during a push for advanced manufacturing in the United States.
“The speed of change is so great,” said Deb Donley, founder and chief experience officer at Vocon, a company that has designed manufacturing and work spaces for the automotive industry.
The list of these projects is growing. GM opened its multibillion-dollar Wallace Battery Cell Innovation Center this winter on its campus in Romulus, Michigan. GM Design West, a campus expansion with an open design concept for engineers, will open in late 2023, along with a new design center. in Pasadena, California, Ford Motor is building a $100 million battery research and development center called Ion Park in Romulus, Michigan, and the Ford Atlanta Research and Innovation Center opened in October to tap talent local to fill software and technology positions.
During the mid-century economic boom, automotive design centers exemplified the serious, streamlined pursuit of a chrome future. GM’s original Tech Center in Warren, designed by Eero Saarinen, opened in 1956 to rave reviews and received National Historic Landmark status. Dubbed the “industrial Versailles,” it set the template for high-minded corporate office campuses.
Automakers today see similar value in creating spaces for creativity and collaboration. In Ford’s case, those investments aren’t just for its own workforce. The auto giant has also spent significant funds on Michigan Central, a 30-acre innovation center in Detroit’s Corktown neighborhood. (Estimates in 2018, when the project was announced, suggested it would cost at least $738 million.)
Sponsors hope that when the offices and co-creation spaces in Central Michigan begin opening this year, they will attract an ecosystem of companies focused on technology and mobility solutions. The city of Detroit has even established a transportation innovation zone in the district to help startups test their ideas.
“Increasingly there is a real blurring between the spaces for physical hardware and software,” said Michigan Central CEO Joshua Sirefman. “For us, that means having the kind of spaces where you can simultaneously have vehicles that you’re testing, while also having a team of software engineers doing their work.”
Automakers spend more on research and development than almost any other industry, accounting for roughly $1,500 of the cost of each new vehicle, according to a report by the American Automotive Policy Council, a trade group. And they will spend significantly over the next decade as self-driving, electrification and mobility services continue to reshape the industry.
This costly transition and the need for new offices and infrastructure comes at a difficult economic time. The price of batteries has started to rise for the first time and stubborn inflation has dampened the higher margins carmakers enjoyed during the pandemic, when low supply led to excess profits.
The shift to electric vehicles also comes with design challenges for engineers reinventing vehicles. For example, much of a car’s space dedicated to the engine and powertrain tunnel can be reused, creating new possibilities for flexible interiors.
Many automakers are testing seats that can rotate 180 degrees or more and spaces where a meeting could be held on the way to work, said Christian Foltz, a strategist at PwC. He believes that car companies need to acquire more software skills, which will play a bigger role in car operations and design.
The overall investment in these new design centers is “in the billions of dollars, that’s for sure,” said Mr. Foltz
In the Bay Area, where automotive startups like Rivian, Lucid Motors, Cruise and Waymo have been vying for talent, development firm Spear Street Capital is building them a new kind of office.
The San Francisco building, a former showroom now known as 300 Kansas, was built to attract technology companies working on new automotive and self-driving software. Set to open this summer, it is located at the base of Potrero Hill, an elevation that allows prototype vehicles to drive up the building’s three floors, and features substantially more electrical capacity and structural support to handle vehicles and heavy equipment.
“In complicated problems, like autonomous vehicles, top talent is absolutely essential,” said Rajiv Patel, president of Spear Street. “Attractive space makes someone who shows up feel like they’re doing something really important.”
The nation’s largest automakers have also invested significantly in creating updated workplaces with a digital focus that they believe can attract and retain a more collaborative workforce.
“When we’re going to scale a problem, we’re going to the same kinds of physical spaces that we’ve used in the past, like proving grounds or labs, but it can be much more virtual,” said Kent Helfrich, GM’s chief technology officer. “Our development used to make hundreds of prototypes. We no longer need this, because we can do development virtually.”
Ford has hired a Norwegian architecture firm, Snohetta, to redesign its 300-acre flagship campus in Dearborn, Michigan. Ford and Snohetta were tight-lipped about details, but renderings and partial descriptions suggest the goal is something more spacious, open, and less. compartmentalized, with the aim of breaking down barriers in a closed institution.
The campus will feature autonomous shuttles, lawns landscaped with native plants and sweeping, curved office buildings that Craig Dykers, Snohetta’s founding partner and architect, likens to an “organic machine.” At the current site, workers sometimes have to get in their car and drive across campus to meet a colleague.
“This is a collaborative research and design institution, a very specific kind of workplace,” Dykers said.
Mr. GM’s Helfrich sees older spaces being replaced by what he calls “monument labs.” His company’s Wallace Battery Center, for example, will have engineering and design talent in the same facility, iterating through new battery prototypes.
And this change will not stop. Industry experts anticipate constant evolution, which means design and development spaces constantly capable of changing direction.
“The market will tell us things, and the technology will tell us things, and we’ll have to be nimble to be able to respond well,” said Mr. Helfrich.
