TAG Industrial Watch: December 2, 2023

There’s been a lot of excitement over the economic impact of Electric Vehicles in recent years but unfortunately, the optimism is not panning out. The establishment of new auto plants and battery factories was expected to usher in a mini modern-day industrial revolution along with increased production of other green energy products like windmills and solar panels. As a result, industrial real estate is supposed to be booming as well, benefiting thousands of suppliers throughout the nation. EV sales have certainly skyrocketed; the 557,000 first-half sales this year nearly matched total sales from 2011 to 2018 (InsideEVs, Inside Climate News).

However, the EV evolution hasn’t made a dent in total auto sales, let alone manufacturing activity in the U.S. The 1.8 million automobiles manufactured over the last year from Q4 2022 to Q3 2023 are down 59% from the 2013 level of production. Meanwhile, manufacturing output is still at the same level today as 10 years ago at $4.1 trillion (FRED). In recent months, automakers such as Ford, GM, and Tesla have announced production cuts of EVs due to slowing sales and a pileup of unsold inventory on dealer lots. EV production may certainly boost specific industrial markets, but investors should not get caught up in the EV hype. With demand for industrial space dropping to the lowest level in over a decade, investors should understand that new opportunities are emerging as we enter a buyer’s market. 

I N D U S T R I A L   N E W S

EV Production Continues To Drive Industrial Activity
GlobeSt.com – November 28, 2023
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Ford To Scale Back Plans For $3.5 Billion Michigan
Battery Plant As EV Demand Disappoints, Labor Costs Rise

CNBC – November 21, 2023
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Tesla Joins GM, Ford In Slowing EV Factory Ramp As Demand Fears Spread
Reuters – October 19, 2023
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Ford Cuts EV Investment After Losing $36,000 On Every EV Sold In Q3
InsideEVs – October 27, 2023
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Walmart Grows Industrial Footprint As Competitors Contract
Bisnow – November 17, 2023
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R E G I O N A L   N E W S

Hines Acquires 1M SF Chicago Industrial Campus
Connect CRE – November 27, 2023
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Clear Height Acquires 121,000-Square-Foot
Industrial Complex In Minneapolis Market

REjournals – November 14, 2023
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VanTrust Adds 330 KSF At Kansas City Industrial Campus
Commercial Property Executive – November 27, 2023
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Brinkmann Constructors Announces
Completion Of Two Industrial Projects

Mile High CRE – November 8, 2023
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Amid Surging Demand For Industrial Space
In Central Texas, More Is Underway In Austin

Austin American-Statesman – October 26, 2023
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