The auto industry is in the midst of a “perfect disruptive storm,” industry veteran Dennis Cuneo, a partner at Fisher & Phillips LLP, told the Rotary Club of Baton Rouge on Wednesday. That means brace yourself for more electric cars and more autonomous vehicles. It’s also a good reason to establish software companies, battery plants or even a gigafactory in the Capital Region.
Stirring up this figurative storm are political action, electrification and technology, says Cuneo, a key player in the startup and expansion of Toyota’s manufacturing operations in North America, who adds Silicon Valley is driving the changes.
“Tim Cook could buy the auto industry if he wanted to,” he says, noting Apple’s CEO has some $244 billion stocked in cash as the corporation plans to build a self-driving car.
President Donald Trump’s planned 25% tariffs on all automobiles imported to the United States will likely lead to retaliatory tariffs, Cuneo says, which could spur domestic investment in manufacturing plants and more opportunity locally.
Baton Rouge dealers are mixed in their views of these tariffs. But Cuneo points to stats from last year, when the U.S. imported 8.3 million foreign vehicles, mostly from Mexico and Canada, and had net imports totaling $57 billion, saying the United States could see some of those dollars.
Auto assembly plants are the biggest economic drivers in the industry, he adds. The Toyota San Antonio assembly plant, for example, has created 5,200 direct jobs and more than $1.9 billion in wages.
If Baton Rouge wants a piece of the pie, its best bet is to invest in a gigafactory for lithium-ion batteries, with Cuneo saying there will need to be at least 10 more in the world by 2025. Electric vehicles are rapidly increasing in popularity, and General Motors has said it would build 1 million electric vehicles by 2026. Industry experts predict that, on average, 23% of all vehicles sold will be electric by 2030.
Autonomous vehicles, meanwhile, are the industry’s next frontier. Morgan Stanley projects a 50% growth in self-driving cars by 2040, which could mean 90% less car accidents, as well as eliminate the need for driver’s licenses. On a business scale, it could mean saving 25% of land normally included in office parking spaces for other development purposes.
“It’s not a question of ‘if,’” Cuneo says. “It’s a question of ‘when?’”