The U.S. original equipment (OE) automotive sector is entering a defining moment, shaped by extraordinary market volatility and rapid technological disruption. According to Turbocharging US Automotive Manufacturing Competitiveness—a comprehensive new report from Arthur D. Little (ADL) produced in partnership with MEMA Original Equipment Suppliers—the industry’s long-term strength now hinges on coordinated action across policymakers, automakers, and suppliers.
Drawing on insights from more than 100 global OE suppliers with significant operations in the United States, along with over 30 interviews with top-level executives, the study outlines a strategic path for transforming the U.S. automotive value chain. ADL’s analysis provides a detailed look at how the industry can reinforce supply chain resilience, rebuild domestic capability, and maintain global competitiveness in the face of mounting challenges.
One of the report’s central findings is that the U.S. OE supply chain remains heavily reliant on imports—a vulnerability that exposes manufacturers to rising costs, geopolitical tensions, and supply uncertainty. While current reshoring initiatives are gaining momentum through policy incentives and strategic realignment, the research stresses that bringing production back to the U.S. is only part of the solution. Reshoring must also strengthen technological leadership, particularly in the rapidly evolving areas of electrification and advanced electronics.
The study evaluates the reshoring potential across key automotive component groups, including body and chassis systems, EV batteries and motors, internal combustion powertrain components, interiors and plastics, tires and rubber, and electronic systems. It also examines how labor availability, automation readiness, supply chain maturity, and regulatory frameworks shape each segment’s competitiveness.
Across all categories, the most pressing constraints remain consistent: ongoing shortages of skilled labor, underdeveloped automation infrastructure, and a fragile domestic supply base for industrial machinery. ADL notes that these issues stem from decades without a cohesive, long-term industrial strategy—something competing manufacturing nations have aggressively pursued.
Addressing these gaps becomes even more crucial as vehicle architectures rapidly evolve. Future competitiveness depends on building robust domestic capabilities in areas such as high-performance semiconductors, advanced electronics, EV propulsion systems, and software-defined vehicle integration. These technologies are also foundational to other critical U.S. industries, including aerospace and defense, heavy machinery, agriculture, marine, and powersports.
Joern Buss, Partner in ADL’s Automotive and Manufacturing Group, emphasized the urgency of the moment: “The U.S. automotive supply chain is experiencing unparalleled pressure—from technological transitions to geopolitical uncertainty. Securing long-term competitiveness requires a collective effort to reshape the industry. Our report identifies the strategic levers that will drive this transformation and the steps needed to enable meaningful change.”
MEMA Original Equipment Suppliers president Collin Shaw echoed this perspective, noting the industry’s economic significance: “Vehicle suppliers represent the largest manufacturing sector in the United States and are vital to our national economy. Informed by real-world industry insight and ADL’s deep expertise, this landmark report delivers a roadmap to enhance supplier competitiveness, accelerate innovation, and ensure the U.S. remains a global leader in automotive manufacturing.”
About Arthur D. Little
Arthur D. Little has been at the forefront of innovation since 1886. We are an acknowledged thought leader in linking strategy, innovation and transformation in technology-intensive and converging industries. We navigate our clients through changing business ecosystems to uncover new growth opportunities. We enable our clients to build innovation capabilities and transform their organizations.
Our consultants have strong practical industry experience combined with excellent knowledge of key trends and dynamics. ADL is present in the most important business centers around the world. We are proud to serve most of the Fortune 1000 companies, in addition to other leading firms and public sector organizations.
About MEMA Original Equipment Suppliers
MEMA Original Equipment Suppliers exclusively serves vehicle original equipment (OE) suppliers, a part of the largest manufacturing sector in the United States and leading the way in new vehicle innovations. Members conceive, design, and manufacture the OE systems and technologies that make up two-thirds of the value of every vehicle, fueling international commerce and meeting society’s transportation needs. MEMA members are committed to safety and sustainability.
