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Subaru won’t produce EVs in the US due to McDonald’s competitive wages

Subaru says it has no plans to invest in building electric cars in the US because of high inflation, saying it can’t compete with wages paid by McDonald’s, Automotive News reports.

During the company’s third-quarter financial results release, CEO Tomomi Nakamura said, “In Indiana, part-time workers at McDonald’s earn $20 to $25 per hour, which is in competition with what temporary workers make at our plant.”

“If we were to build a new plant, it would be very difficult to hire new people for that. Labor costs are rising now. It is quite challenging for us to secure workers for our Indiana plant, including those of suppliers,” Nakamura said.

Subaru currently employs about 6,000 workers at its vehicle assembly plant in Indiana.

Many foreign automakers have announced plans to invest in manufacturing electric vehicles in the US to take advantage of tax incentives offered by the Inflation Reduction Act. The Japanese automaker currently offers only one electric car, the Subaru Solterra, but that model is built in partnership with Toyota and is a replica of the bZ4X.

Nakamura said Subaru is evaluating how it could benefit from the tax incentives but said wages would need to come down first, adding that the company finds it “difficult to figure out how the IRA will help us bring benefits to our customers.”

US demand for the company’s products is strong, with a 25% increase in sales to 631,000 units this fiscal year. Nakamura said they currently have around 48,000 backorders in the US and only a 10-day supply of inventory.

Subaru saw its third-quarter net income nearly double to $350.2 million, and its operating profit grew to $508.6 million. The company expects net income and operating profit to triple this fiscal year compared to last year.

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