The electric vehicle revolution isn’t on its way. From where Kenny Anderson sits, it has already broken ground.
“There’s no stopping it,” said Mr. Anderson, an advanced manufacturing operations lead at DPR Construction, a builder focused on factories like the mammoth battery plants powering this industrywide change. “Every couple of weeks, there’s a new multibillion-dollar facility being constructed. 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 American automakers like General Motors and Tesla an advantage over foreign competitors. A total of $135 billion in government funds will be directed to vehicle electrification and new factories.
As they accelerate their shift to electric vehicles, automakers will also need new facilities like design and development sites. But the industry faces challenges, including rising costs for materials.
“In order to win in what we call the automotive endgame, traditional companies need to change fundamentally, basically now,” said Klaus Stricker, who co-leads the automotive practice at the consulting firm Bain & Company, where he is a partner. “We currently see the industry facing quite a lot of pressure over the next two years.”
Last year, skyrocketing demand sent a record $128 billion into investments for E.V. manufacturing and battery plants, which require a large footprint. A battery plant can cover 4.5 million square feet, roughly the size of 25 Walmart Supercenters. Projections suggest the country may need 120 or more additional such plants.
Before those batteries and the cars that use them can be made, they must be conceptualized. So automakers are pouring money into 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 venting to expel the exhaust from engines of older, internal combustion vehicles running indoors. They are part of a new generation of innovation centers emerging during a push for advanced manufacturing across the United States.
“The velocity of change is so great,” said Deb Donley, founder and chief experience officer with Vocon, a firm that has designed manufacturing and work spaces for the auto industry.
The list of such projects is growing. G.M. opened its multimillion-dollar Wallace Battery Cell Innovation Center this winter on its campus in Romulus, Mich. GM Design West, an expansion of the campus featuring an open design concept for engineers, will open in late 2023, along with a new design center in Pasadena, Calif. Ford Motor is building a $100 million battery research and development center called Ion Park in Romulus, Mich., and the Ford Atlanta Research and Innovation Center opened in October to tap into local talent to fill software and tech positions.
During the midcentury economic boom, automotive design centers exemplified the streamlined, serious pursuit of a chrome-plated future. G.M.’s original Tech Center in Warren, designed by Eero Saarinen, opened in 1956 to rave reviews and was given National Historic Landmark status. Nicknamed the “industrial Versailles,” it set the template for high-minded corporate office campuses.
Carmakers see similar value today in creating spaces for creativity and collaboration. In the case of Ford, these investments are not just for its own work force. The auto giant has also spent significant funds on Michigan Central, a 30-acre innovation hub in Detroit’s Corktown neighborhood. (Estimates in 2018, when the project was announced, suggested that it would cost at least $738 million.)
Backers hope that when offices and maker spaces at Michigan Central start opening this year, they will attract an ecosystem of firms focused on technology and mobility solutions. The City of Detroit has even established a transportation innovation zone in the district to help start-ups test their ideas.
“Increasingly, there’s a real blurring between spaces for physical hardware and software,” said Michigan Central’s chief executive, Joshua Sirefman. “For us, that means having the kinds of spaces where you can simultaneously have vehicles you’re testing while also having a team of software engineers do their work.”
Spending on research and development by automakers is higher than it is in just about any other industry, accounting for roughly $1,500 of the cost of every new vehicle, according to a report from the American Automotive Policy Council, a trade group. And they will spend significantly in the coming decade as autonomous driving, electrification and mobility services continue to reshape the industry.
This costly transition, and the need for new offices and infrastructure, come during a challenging economic moment. The price of batteries has started to rise for the first time, and stubborn inflation has dampened the higher margins that carmakers enjoyed during the pandemic, when low supply meant excess profits.
The switch to E.V.s also includes design challenges for engineers reimagining vehicles. For example, much of the space in a car dedicated to the engine and powertrain tunnel can be repurposed, creating new possibilities for flexible interiors.
Many carmakers are testing seats that can swivel 180 degrees or more, and spaces where a meeting could be held en route to work, said Christian Foltz, a PwC strategist. He believes that auto companies need to acquire more software abilities, which will play a bigger role in car operations and design.
The global investment in these new design centers is “in the multibillions of dollars, that’s for sure,” Mr. Foltz said.
In the Bay Area, where automotive start-ups like Rivian, Lucid Motors, Cruise and Waymo have been fighting for talent, the development firm Spear Street Capital is building a new kind of office for them.
The San Francisco building, a former showroom now known as 300 Kansas, was built to attract tech firms working on new automotive software and autonomous driving. Preparing to open this summer, it’s set at the base of Potrero Hill — an elevation that allows for prototype vehicles to be driven onto all three of the building’s floors — and boasts substantially more electric capacity and structural support to handle heavy vehicles and equipment.
“In complicated problems, like autonomous vehicles, top talent is absolutely essential,” said Rajiv Patel, the president of Spear Street. ”Compelling space makes someone showing up feel like they’re doing something very important.”
The nation’s largest automakers have also invested significantly in creating updated work spaces with a digital focus that they believe can attract and retain a more collaborative work force.
“When we go to swarm a problem, we go to the same sort of physical spaces we’ve used in the past, like proving grounds or laboratories, but it can be much more virtual,” said Kent Helfrich, chief technology officer for G.M. “Our development used to make hundreds of prototypes. We don’t need that anymore, because we can do development virtually.”
Ford has enlisted a Norwegian architecture firm, Snohetta, to redesign its flagship 300-acre campus in Dearborn, Mich. Ford and Snohetta were tight-lipped about the details, but renderings and partial descriptions suggest the goal is something more airy, open and less compartmentalized, aiming to break down barriers in a once-siloed institution.
The campus will feature autonomous shuttles, landscaped lawns with native plants and sweeping, curved office buildings that Craig Dykers, a Snohetta founding partner and architect, compares to an “organic machine.” At the current site, workers sometimes have to jump 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,” Mr. Dykers said.
Mr. Helfrich of G.M. sees older spaces, what he calls “monument laboratories,” being replaced. His company’s Wallace Battery Center, for instance, will have engineering and design talent in the same facility, iterating through new battery prototypes.
And this shift won’t stop. Industry experts anticipate constant evolution, which means design and development spaces constantly able to change directions.
“The market is going to tell us stuff, and technology is going to tell us stuff, and we’re going to have to be agile to be able to respond well,” Mr. Helfrich said.