Michigan must move decisively to protect its $348 billion stake in the global automotive industry or risk losing jobs, engineering and production to rival states and overseas competitors, according to a new report from MichAuto, the statewide industry advocacy group. Glenn Stevens, MichAuto’s executive director, said the state has reached “an inflection point like we’ve never seen before” and called 2026 a decisive year for the state’s signature economic sector. The report arrives as Michigan prepares for the Detroit Auto Show, scheduled for January 17–25 at Huntington Place.

Michigan’s auto sector, which accounts for roughly one in five jobs in the state and carries an $83 billion annual payroll, faces mounting pressure from southern states recruiting Michigan suppliers, rapidly advancing Chinese electric vehicle makers, and a turbulent stretch of federal policy shifts that led automakers to scale back their EV ambitions.

Michigan’s auto industry advocacy group is sounding an alarm ahead of the state’s largest automotive showcase, warning that the $348 billion sector risks losing ground to competing states and China unless the state overhauls its economic and innovation strategy.

MichAuto, the statewide industry group, released a report late last month that executive director Glenn Stevens described as a “call to action.” The industry accounts for about 20% of Michigan jobs and carries an $83 billion annual payroll, according to MichAuto.

“We are at an inflection point like we’ve never seen before,” Stevens told Bridge Michigan. “We’ve got to be making changes and doing things differently to protect our signature industry and our economy as a whole.”

Pressures Converging on Michigan’s Auto Sector

The report identifies three overlapping threats to Michigan’s automotive dominance.

Southern states are constructing what the report calls a “battery belt,” actively recruiting automakers and parts suppliers — including companies based in Michigan — with competitive incentives. At the same time, the Chinese auto industry is advancing “at an astounding rate as it attempts to dominate the race for electrification,” the report said.

Meanwhile, 2025’s waves of tariff changes and shifts in federal fuel economy standards prompted major automakers to curtail their electric vehicle strategies. Ford Motor Co. said in December it would take a $19 billion hit to shift its EV manufacturing capacity toward gas-powered vehicles while adding energy storage systems to its battery lineup.

University of Michigan economists projected that light vehicle production will increase 2.7% in 2026, but estimated new vehicle prices will climb 6.6%, or roughly $3,100 per vehicle. Anderson Economic Group, a policy research firm in East Lansing, put the average new vehicle price in November at $49,814.

The Detroit Three — General Motors, Ford, and Stellantis — saw their combined share of U.S. light vehicle sales slip from 36.1% in 2023 to 34.2% in 2024, according to U-M economists, who said they expect that two-decade market share slide to reverse in 2026 as new federal policies take effect.

MichAuto’s Policy Agenda

MichAuto said it will release a policy and economic development roadmap for the automotive industry over the course of 2026. The group is advocating for several state-level actions:

  • Workforce development: restoring funding to Going PRO, a skills-training program whose legislative allocation was reduced, and building a pipeline to replace retiring workers
  • Business climate: tax and regulatory changes the group says would make the state more competitive
  • Economic development incentives: long-term sustainable programs to replace the $2 billion Strategic Outreach and Attraction Reserve (SOAR) Fund, which the Legislature defunded in 2025
  • Industry transition support: programs to help companies and workers adapt to new manufacturing technologies and processes

Stevens said Michigan should double down on research and development and elevate innovation as a core business priority. He noted that Michigan already leads the nation in privately funded automotive R&D.

Innovation hubs such as Michigan Central — funded by Ford and the state — should play a broader role in the state’s economy as they mature, Stevens said, with potential spillover benefits to sectors including life sciences.

Broader Economic Backdrop

The MichAuto report arrives alongside a cluster of economic warnings about Michigan’s standing relative to the rest of the country.

Business Leaders for Michigan released a 40-page roadmap in November for the next governor — to be elected in fall 2026 — noting that Michigan ranks 50th in household income growth over the past 25 years. The state has also seen flat growth in high-wage professional jobs over two decades, while such jobs grew 35% nationally, and fell from 16th to 44th in fourth-grade reading proficiency over 30 years.

University of Michigan economists separately warned in November that Michigan is poised to miss out on projected national job growth in 2026 because of its aging workforce and slow population growth.

The MichAuto report represents a departure from the group’s typical publications, which are released every 18 months and focus primarily on data updates, Stevens said.

The Detroit Auto Show opens January 17 at Huntington Place, giving the industry a high-profile backdrop against which the report’s urgency will be tested.