It has been this year, 2022, when Subaru launched its first fully electric SUV: the Subaru Solterra. A proposal that, from Japan, has reached different markets: among them the USA. There it is sold, but not manufactured. And there is a reason that explains this decision: a most unexpected reason because it is related to McDonald’s.
One of the solutions that allow manufacturers save on production and import It goes through having its own factories in the markets that have the most weight in its sales. Eliminating everything related to that pair of processes translates into more affordable models with greater availability for the driver.
Subaru has a plant in Indiana, where it shapes models like the Subaru Outback, Legacy, Impreza, and Ascent. Nearly all of the Japanese brand’s US offering comes off those production lines, but the Subaru Solterra comes to life in Japan. If you already have the facilities, why not start manufacturing electric vehicles on US soil?
The Inflation Reduction Act
Tomomi Nakamura, CEO of Subaru, assured that (for now) he will not take the production of his electric cars to the US: he will continue with his plans to manufacture them in the plant that they will build in Japan and that it should be ready in 2027. And he gave two reasons for this: one legislative and one economic.
In the current situation, it is very difficult for Subaru to comply with the requirements of the Inflation Reduction Act (IRA) that the United States put into effect a few months ago. This standard proposes Important incentives for the purchase of electric cars that have been manufactured entirely in the North American country: both the vehicle and its battery packs. The Subaru Solterra, therefore, would be left out.
The second reason is wages. As collected Automotive NewsTomomi Nakamura talked about how difficult it would be to deal with the prevailing salary inflation in Indiana: from her point of view it would be difficult to find workers for a hypothetical factory dedicated to electric cars… by McDonald’s figures.
The CEO of Subaru explained that in the aforementioned state “McDonald’s part-time workers earn between $20 and $25 an hour and this competes with what temporary workers at our plant earn.” According to Indeed and Glassdoor, wages at those facilities, where more than 5,900 people work, range from $17 to more than $48 an hour.
Tomomi Nakamura added that if they had to “build a new plant, it would be very difficult to hire new people For that. Labor costs are increasing now: for us it is quite a challenge”. Thus, Subaru does not consider building an electric car factory there, unless wages drop.
Until last September, inflation in the United States stood at 8.2%: a figure that has fueled concerns about a possible recession. The Subaru CEO acknowledged the risk, but assured that Demand for your brand remains strong in the US: so much so that, for this year, they believe that sales will have increased by 25%.