#19 – Inside Our Industry – Electric Vehicles Should be a Win for American Workers
Posted on | Inside Our Industry
With the increasing production expansion and availability of electric vehicles (EVs), we anticipate many changes in manufacturing processes over the next decade. The Center for American Progress recently posted an extensive report on the expansion of electric vehicles and how federal policies can ensure a good jobs future for workers in the United States. We are sharing some of their findings below. As we mentioned in our August 4, 2020 Inside Our Industry (Are You Ready for Electric Vehicles?) we at Agracel remain keenly aware and interested in the growth of EV components, as many of our buildings are filled with automotive suppliers.
Electric Vehicles Should be a Win for American Workers
By Karla Walter, Trevor Higgins, Bidisha Bhattacharyya, Malkie Wall, and Rita Cliffton September 23, 2020
The global auto manufacturing industry is undergoing a rapid transition from reliance on internal combustion engines (ICEs) to battery electric vehicles (EVs). This shift is essential for cutting greenhouse gas emissions in order to avoid the most catastrophic impacts of climate change and presents a major opportunity for the U.S. auto manufacturing industry. However, U.S. public and private sector investment in EVs lags behind that of other countries, especially China, threatening both the United States’ ability to reach climate goals and the long-term competitiveness of the domestic auto industry, which has long been a source of high-quality, unionized jobs that support a strong middle class. Federal policymakers must invest in EVs and charging infrastructure now in order to support good domestic jobs and cut emissions in the long term. If done right, federal policy can help mitigate the climate crisis, deliver a win for American workers, and ensure national competitiveness in key areas of economic growth, decarbonization, and technological innovation.
The automobile industry is a significant player in the U.S. labor force, employing almost 3 million Americans in auto dealerships and manufacturing. Almost 1 million Americans work in motor vehicle and motor vehicle components manufacturing alone, with roughly three-quarters of autoworkers employed in auto parts and one-quarter working in assembly. Hundreds of thousands more Americans work in key supplier industries such as steel and aluminum. The auto industry has grown steadily since the Great Recession, bringing back almost 340,000 manufacturing jobs since mid-2009 while also rapidly reducing vehicle emissions, improving fuel economy, and transforming industry competitiveness. However, the COVID-19 crisis could threaten that trend, with auto manufacturing employment down by more than 30 percent in May 2020 compared with May 2019.
While traditional ICE vehicles continue to make up the bulk of industry production, a growing share of the auto sector works in EV technology. Moving forward, the industry will likely create new jobs for manufacturing new component parts—such as batteries, electric motors, and power electronics—and rapidly building out new charging infrastructure.
The shift toward EV technology will also require a massive buildout of EV charging infrastructure, which will have largely positive jobs impacts. Charging infrastructure deployment supports and accelerates EV sales, and visible public and workplace charging provides range confidence to future EV buyers. For example, a regional survey of consumers in the Northeast found that the likelihood of considering an EV increases by 80 percent if there are increased numbers of visible charging areas, and 83 percent of respondents cited that there are not enough charging stations currently available.
With fewer parts and lower mechanical complexity in their propulsion systems, EVs will significantly erode employment in the production of engines, transmissions, exhaust, and conventional fuel systems. For example, Ford estimates that simplification in the assembly of EVs could lead to a 50 percent reduction in capital investments and a 30 percent reduction in labor hours compared with ICE manufacturing. As a result, the EV transition may result in fewer U.S manufacturing jobs as employment shifts from the production of ICEs to electric powertrains.
However, this decline could be significantly offset by growth in electric powertrains and advanced technology components that create new jobs in producing batteries, electric motors, electronics, thermal systems, braking systems, and semiconductors. Components and materials that will continue to be manufactured for EVs must also be prioritized. For example, the steel, tire, flat glass, seating, and aluminum industries are all key auto suppliers that support hundreds of thousands of good jobs.
Conclusion
With the transportation sector comprising the largest source of U.S. greenhouse gas emissions, vehicle electrification is an essential strategy for achieving science-based emissions reduction targets to prevent the worst impacts of climate change. Investing in this new industry will be critical for maintaining international competitiveness and domestic supply chains.
Federal funding to incentivize consumer demand, drive manufacturer investments, and build out electric vehicle infrastructure should be made contingent on key job quality and domestic content standards. In structuring funding, policymakers must be realistic about present EV capacity while also ensuring that taxpayer dollars do not subsidize low-road employers or erode job quality standards in the broader industry. By designing federal policies that encourage both rapid vehicle electrification and the creation of high-quality, good-paying domestic jobs throughout the EV ecosystem, policymakers can satisfy the priorities of climate and labor advocates and ensure economic prosperity for future generations. In a period of significant economic and environmental challenges, the transition to EVs presents a powerful and positive opportunity to improve conditions for both American workers and the climate.