What is going to It Take designed for Electric Vehicles to generate Jobs, Not Reduce Them?

Find the Right CRM Software Now. It's Free, Easy & QuickFollow our CRM News page for breaking articles on Customer Relationship Management software. Find useful articles like How to Choose a CRM System, CRM 101, the CRM Method and CRM and the Cloud. And when you're ready let us help you find the right Customer Relationship Management software.


 

https://static01.nyt.com/images/2021/09/22/business/22ev-jobs/22ev-jobs-moth.jpg

A report by a liberal think tank tries to quantify the potential employment gains and losses, concluding that subsidies will soon be crucial.

When President Biden announced his multitrillion-dollar jobs plan in March, it included nearly $175 billion in spending to encourage Americans to purchase electric vehicles.

The money would help ensure “that these vehicles are affordable for all families and manufactured by workers with good jobs, ” the White House wrote at the time.

Now, as Mr. Biden’s plan wends its way through Congress, a liberal think tank has tried to flesh out the number of jobs to be gained or lost in the transition away from internal-combustion vehicles.

The report , released Wednesday by the Economic Policy Institute, concluded that it might take government subsidies focused on developing a domestic supply chain and increasing demand for U. S. -made vehicles to avoid job losses.

It found that without additional government investment, the industry could lose about 75, 000 jobs by 2030, the year by which Mr. Biden wants half the new vehicles sold in the country to be electric.

By contrast, the report said, if government subsidies were geared to increase the portion of electric vehicle components which can be manufactured domestically, and also to increase the market share of U. S. -made vehicles, the could add about 150, 000 jobs by the end of the decade.

“That’s the payoff — making the sector a center of good jobs again, ” said Josh Bivens, an economist who is one of many report’s authors. “If we don’t make an effort to react proactively with good policy we’ll see continued downward pressure on the number of good jobs. ”

Looming over the transition to electric vehicles is the fact that they’ve substantially fewer moving parts than gasoline-powered ones and require less labor to manufacture — about 30 percent less, according to figures from Ford Motor. The vehicle-manufacturing industry employs just a little under one million people domestically, including suppliers.

Rebecca Cook/Reuters

There are essentially two ways to offset the projected job losses: to increase the proportion of each vehicle’s parts that are made domestically — specifically in the powertrain, the key parts and systems that power a car — also to sell more vehicles assembled in the United States.

Mr. Bivens and his co-author, James Barrett, an economic consultant, examine the effects of doing both. They note that roughly three-quarters of the parts in the powertrain for a U. S. -made gasoline vehicle are produced domestically, versus less than half of the parts in the powertrain of a U. S. -made electric vehicle.

Raising the proportion of domestic content in electric vehicles so that it mirrors gas-powered ones could save yourself tens of thousands of jobs per year, they estimate — potentially more than half the likely job losses that would arise without additional government action.

But to transform likely job deficits into job gains, Mr. Barrett and Mr. Bivens find, it is necessary to boost the market share of vehicles made in the usa. According to the study, the percentage of vehicles sold in the United States which can be made domestically has hovered around 50 percent over the past decade. If it were to rise to 60 percent, the authors conclude, the industry could gain over 100, 000 jobs in 2030.

If market share were instead to drop to 40 % by the end of the decade and there were no upsurge in the domestic content of electric vehicle powertrains, the industry could lose more than 200, 000 jobs, the report finds.

Under the Democratic plan circulating in Congress, a current $7, 500 tax credit for the purchase of a new electric vehicle would rise as high as $12, 500. An extra $4, 500 would affect vehicles assembled at unionized factories in the usa. Consumers would get the final $500 if their vehicle had a U. S. -made battery. The facts could change facing opposition from automakers with nonunion U. S. plants.

Democrats are also discussing subsidies to encourage manufacturers to set up new factories or upgrade old ones.

Sam Abuelsamid, an auto industry analyst at Guidehouse Insights, said that domestic automakers had a chance to increase market share as the industry electrifies and that an expanded consumer tax credit would help.

“They are targeting a lot of the market segments that are particularly strong-selling — crossovers, pickups, ” Mr. Abuelsamid said. “There is certainly potential for them to claw back some market share from Asian brands. ”

Still, that he warned, the window for seizing the ability could be relatively narrow as Asian automakers like Toyota and Honda, which have lagged somewhat in their electric vehicle planning, introduce more electric offerings.

The question of whether manufacturers will locate production of electric vehicles and their components in the United States as demand grows, and the extent to which government subsidies might help ensure that this happens, has been a subject of debate in recent years.

Dale Hall, a researcher at the International Council on Clean Transportation, an investigation organization, said within an interview that electric vehicles tend to be manufactured in the region where they are sold, both to save on transportation costs and to be much more responsive to consumers’ needs.

On the Scene: An E. V. Boom Town

Noam Scheiber

Noam Scheiber 📍Reporting from Normal, Ill.

On the Scene: An E. V. Boom Town

Noam Scheiber

Noam Scheiber 📍Reporting from Normal, Ill.

Akilah Townsend for The New York Times

Recently i visited the boom town of Normal (yes, that’s a genuine place) in Illinois. It once thrived, but a Mitsubishi plant there power down in 2015. Now, Normal is growing rapidly again after an electric-truck maker moved in.

Here’s what residents told me →

On the Scene: An E. V. Boom Town

Noam Scheiber

Noam Scheiber 📍Reporting from Normal, Ill.

Akilah Townsend for The New York Times

Becky Skeen began at the Mitsubishi plant in the 1980s and was one of the few workers who stayed on after it closed. Her job, sorting leftover material, was like something out of the movie “Wall-E. ” Or —on darker days— Becky told me, “The Walking Dead. ”

On the Scene: An E. V. Boom Town

Noam Scheiber

Noam Scheiber 📍Reporting from Normal, Ill.

Akilah Townsend for The newest York Times

Mitsubishi employees like Becky were thrilled when electric truck maker, Rivian , bought the plant in 2017. But the early years were slow. When Tony Overmier, a maintenance worker, would tell suppliers he was from Rivian, “They’d say, ‘From who? ’” he recalled.

On the Scene: An E. V. Boom Town

Noam Scheiber

Noam Scheiber 📍Reporting from Normal, Ill.

Akilah Townsend for The New York Times

The local economy was also dicey. Delta Air Lines ended nonstop flights to Detroit after Mitsubishi closed. Marty Trunk, a local homebuilder, trimmed his staff from nine to just two, including himself. “I was racking your brains on, are we surviving? Are we dying? ”

On the Scene: An E. V. Boom Town

Noam Scheiber

Noam Scheiber 📍Reporting from Normal, Ill.

Akilah Townsend for The New York Times

In 2019, Rivian raised nearly $3 billion from investors. The following year, Delta resumed flights to Detroit. The local Marriott was filling up and carrying out a brisk business in to-go orders for Rivian, including hot chocolate for several hundred people.

On the Scene: An E. V. Boom Town

Noam Scheiber

Noam Scheiber 📍Reporting from Normal, Ill.

Akilah Townsend for The newest York Times

The growth will likely continue. Rivian is seeking a valuation of roughly $70 billion in an initial public offering and expects to double its local head count around 2, 600.

On the Scene: An E. V. Boom Town

Noam Scheiber

Noam Scheiber 📍Reporting from Normal, Ill.

Akilah Townsend for The New York Times

Patrick Hoban, who heads the local economic development council, said how many companies considering a move to the area more than doubled from a similar point two years ago: “The phone is ringing off the hook. ”

Sep. 17, 2021

Item 1 of 8

But his group has found that there’s nonetheless variation among regions: About 98 percent of electric vehicles sold in China last year were assembled in that country, while 72 per cent of those sold in the usa were assembled domestically. One key big difference is government policy. “China provided lots of subsidies to manufacturers in the early days, ” Mr. Hall said.

Zoe Lipman of the BlueGreen Alliance, a coalition of labor and environmental groups that advised the report’s authors, said an important concern in the United States was whether automakers would shift production abroad.

“Many companies have made very promising commitments to make major investments in this sector, ” Ms. Lipman said. “It’s not clear where they’ll make those investments yet. ” Her group supports government incentives to make it cheaper to buy electric vehicles and subsidies for companies to develop manufacturing facilities in the usa.

When it comes to vehicle components as opposed to final assembly, the United States is apparently even further behind other countries. This is specially true for battery packs, which can cost around $15, 000 and are by far the most high priced component of an electric vehicle powertrain.

In accordance with a report this year by the middle for Strategic and International Studies and BloombergNEF, an energy research group, well over half the value of batteries used in U. S. -made electric vehicles accrued to businesses based abroad, primarily South Korea, Japan and China.

By contrast, the report noted, “in China 100 percent of the worthiness of a finished battery tends to accrue locally. ”

Mr. Abuelsamid along with other analysts have argued that battery production will naturally wind up in the United States as more electric vehicles roll off assembly lines, noting that batteries can be expensive to ship and that doing so increases their carbon footprint. Manufacturers often want component-makers nearby to minimize supply disruptions as well. Recent announcements by General Motors and Ford that they are accepting a greater role in battery production may actually reflect this thinking.

Analysts from BloombergNEF have painted a somewhat more mixed picture. The report from early in the day this year found that Chinese, Japanese and South Korean battery makers continued to source the most valuable battery parts from their house countries well when they set up assembly plants in Europe, where in fact the electric vehicle market is growing rapidly.

But Cecilia L’Ecluse, a BloombergNEF analyst in Britain, said there have been a number of recent announcements in Europe of new plants that will make battery components.

European governments have been enacting subsidies for battery production.

Find the Right CRM Software Now. It's Free, Easy & Quick


Follow our CRM News page for breaking articles on Customer Relationship Management software. Find useful articles like How to Choose a CRM System, CRM 101, the CRM Method and CRM and the Cloud. And when you're ready let us help you find the right Customer Relationship Management software.

Leave a Reply Text

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.