America’s auto industry: A $1.2 trillion economic engine

Most working in the US auto industry have some sense of how important the business is to the American economy. But a new report by Alliance For Automotive Innovation paints a more vivid picture of the depth of that impact.

First things first: The report by Alliance for Automotive Innovation—entitled 2024 Data Driven: Navigating the Road Ahead—specifically zeroes in on some key findings pertaining to America’s industrial base, economic security, and global competitiveness.

• The automotive ecosystem drives $1.2 trillion into the U.S. economy each year—which amounts to 4.8% of the GDP.

• According to the report, the auto industry contributes 10.1 million jobs coast-to-coast and is responsible for $730 billion in 2022 paychecks. 

• Every $1 in vehicle manufacturing creates an additional $4.23 in economic value.

The top five states that contribute the most to the auto industry’s GDP include Michigan (9.2%), Kentucky (6.4%), Tennessee (6.0%), Indiana (5.7%), and Alabama (5.4%) The top five for auto industry employment include California (841,986), Texas (726,196), Florida (513,287), Michigan (409,220), and Ohio (309,910). 

Zooming in: With 10.6 million vehicles produced in the U.S. and 15.2 million sold in the states, the auto industry is also a major source of tax revenue on the federal, state, and local levels.

• According to the report, more than $340 billion in federal, state, and local revenue is generated annually by auto manufacturing.

• In 2023, states received more than $35 billion in tax revenue from new vehicle sales and more than $20 billion from used vehicle sales.

Digging deeper: In recent years, the auto industry’s growth and economic impact have been further propelled by electric vehicles and new technology as the business continues to evolve and adopt a myriad of new innovations.   

• Automakers and battery partners have committed about $125 billion for 80-plus EV and EV battery projects, creating 113,000 jobs across 18 states.

• More than 90% of new vehicles today are equipped with advanced driver assistance systems (ADAS).

Looking ahead: With more automotive innovations on the horizon, expect the industry’s impact on the American economy to continue to grow and expand into other areas. The ADAS market, alone, is projected to grow to nearly $10 billion in the US by 2030.  Adding to that growth, the artificial intelligence market in the automotive sector is anticipated to exceed $13 billion by 2034.

Bottom line: The auto industry isn’t just big—it’s a pillar of the U.S. economy. And as technology evolves the industry could create even more jobs, more investment, and opportunities for the future.

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