Private Investment in Automotive Fixed Assets
Private investment in automotive fixed assets in North America has seen remarkable growth, particularly since the implementation of the USMCA (United States-Mexico-Canada Agreement). According to General Motors, investments have quadrupled compared to the period before the agreement was ratified.
General Motors’ Capital Expenditures
In the fiscal year 2025, General Motors allocated $9.3 billion to capital expenditures, which is a 14.1% decrease from the $10.83 billion spent in 2024. This reduction is part of GM’s strategy to optimize capital as the company transitions towards electric vehicles and battery production. Looking ahead, GM projects capital expenditures for 2026 to be between $10 billion and $12 billion, covering investments in automotive operations, joint ventures in battery cell production (like Ultium Cells), and new vehicle platforms.
Trends in private automotive spending in North America under the USMCA: General Motors’ projected investments through 2026 and more than $346,000 million announced for regional industrial relocation.
USMCA Impact on Investment
Since the conclusion of USMCA negotiations in late 2018, automakers and suppliers have announced over $346 billion in investments in the United States. These funds are intended to relocate production and comply with the treaty’s automotive rules of origin. The USMCA has established high standards for investment and sourcing, leading to increased investment in the U.S. automotive sector.
These investments are vital for job creation across North America. For instance, General Motors utilizes a substantial number of U.S.-made powertrain components in vehicles produced in Mexico, establishing a link between jobs in Mexico and the U.S.
General Motors’ Contributions
Since the USMCA took effect, GM has invested over $60 billion in North America, contributing approximately $50 billion directly to U.S. GDP. Each job at GM supports eight additional jobs in the U.S. economy.
Omar A. Vargas, GM’s vice president and head of Global Public Policy, emphasized the importance of the USMCA in sustaining these investments, arguing that it helps integrate North America’s industrial capabilities and maintain U.S. automakers’ global competitiveness.
These developments highlight the significance of the USMCA in shaping the future of automotive manufacturing and investment in North America, driving job creation and economic growth.
