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The Shift to EVs Brings Changes to Vehicle Supply and Manufacturing

Zach Chan
Aug 17, 2021

GHI Blog

Light duty vehicles account for 16.82% of US greenhouse gas emissions (GHG). As a result, California plans to prohibit the sale of new gasoline-powered vehicles by 2035. This comes as no surprise as California, with its unique geography and air quality challenges, has long led the push to electrify. An increasing number of countries are placing an expiration date on internal combustion engines (ICEs), including Canada, UK, France, and Spain. Recent advancements in battery technologies that boost range and cut charging time are allowing EVs to be a viable replacement to ICEs as a key step to reducing the US’s overall GHG emissions. However, differing production and maintenance requirements for EVs will be a source of disruption in the auto industry, impacting existing jobs and traditional lines of work. 

Car Brands Are Taking Notes

In July 2021, Mercedes-Benz announced its target to go all-electric by 2030, investing $47 billion in battery EVs. Other companies, such as Volkswagen, Jaguar, and Volvo, also plan to phase out diesel and gasoline power trains completely. These decisions reflect the overall car market’s shift to EVs and away from ICEs.  

In turn, this monumental shift will favor battery scientists and software engineers and create uncertainty for traditional mechanics and powertrain engineers. EV drivetrains have fewer than 20 moving parts while ICE drivetrains have upwards of 2,000. Such a discrepancy means that EVs require significantly less frequent and less complicated maintenance. Additionally, EVs are inherently more modular and scalable, enabling varying models to share similar systems. Overall, a decrease in variability also allows for EVs to be more reliant on automated manufacturing.

Moving Forward Means Supporting Workers

For many workers, a clear path to security is still unknown. A whopping 150,000 people are involved in the making of components for ICEs and an additional 750,000 are tied to the auto repair industry. Audi has already announced that it plans to cut 7,500 jobs globally in its shift to EVs. As other car makers are bound to make similar announcements, federal policy must ensure global competitiveness with economic growth, decarbonization, and technological innovation. Although the transition to EVs will create uncertainty, efforts to mitigate the impact on the labor force must be a priority when planning adoption of EVs.

Reducing job loss will be difficult but can be achieved by developing a domestic supply chain for battery materials and systems. Today, China leads the global battery supply chain, accounting for 80% of the world’s total output of raw materials for advanced batteries. Consumer incentives for US-produced EVs and direct support for domestic manufacturers should be at the forefront of federal plans. Additionally, investments in public sector infrastructure will give consumers the ability to conveniently charge their vehicles and facilitate the rapid adoption of EVs. Federal support for EVs should also include mandates for quality wages and worker protections.

The clean energy transition needs to work for everyone. Although this is only one piece of the puzzle, it is as important as ever that we grapple with all aspects of this transition so we can take the necessary steps to reduce harm. Only by building out domestic battery plants and materials processing and creating robust, practical government incentives will we meet the needs of an evolving energy economy and make it work for all stakeholders.