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The transformation to electrified transport is well underway. We have seen significant increases in market share, business investment, and administrative policies supporting the shift to electric vehicles. However, challenges remain as to how and when the transition to all forms of electric and battery-powered hybrid (xEV) vehicles will occur and the impact on auto jobs and the regional economy in the Midwest.
Current market
In May 2021, the xEV market, including VHE, PHEV, BEV and FCEV, continued to increase its market share of total light vehicle sales in the United States, up to around 8%. Compared to May 2020, xEV sales have grown over 156% year over year, showing huge growth. Several factors are supporting the increase in sales of electric vehicles, including an increase in the number of consumers choosing electric vehicles, and not just to save money at the pump. Model offerings from companies are also contributing to the growth of this technology. We are seeing more and more automakers offering electric-only options, such as the Tesla Model S (pure electric) and the Toyota Sienna (hybrid). Forecasters predict that the number of xEV nameplates will grow from 65 models in 2020 to more than 200 by 2025. While we will see several xEV models in various segments, the expected volumes for each of these vehicle platforms remain low. medium term — expecting only over 4,000 units, on average, by 2025.
Although sales of xEV have increased, many challenges remain. Some factors regarding the uncertainty of the timing of this transition include customer acceptance, performance and cost of batteries, availability of charging infrastructure, availability of products and batteries, and government policies and incentives. .
Job and skills required
Many work in the production, sale and support of vehicles in the automotive industry. As the industry continues to advance xEV technology, there are still many concerns about how workers will be affected. In April 2021, employment of motor vehicles and parts in the United States exceeded 715,000. Employment in the industry has started to grow since the COVID-19 pandemic after experiencing an initial sharp decline in use. Since April 2020, the United States has seen a significant improvement in the number of jobs, but employment has not yet returned to pre-pandemic levels.
While traditional internal combustion engine (ICE) vehicles continue to constitute the bulk of the output of the US auto industry, a growing share of automotive employees work in xEV technology. The industry is likely to create new jobs for manufacturing components such as batteries, electric motors and power electronics while building a much needed electric vehicle charging infrastructure.
However, due to the reduced number of parts and lower mechanical complexity in xEV propulsion systems, it is likely that the production employment of conventional ICE powertrains, exhaust and fuel systems will decrease. For example, Ford announced that simplifying the assembly of the xEV could result in a 50% reduction in capital investment and requires 30% less man-hours than traditional ICE manufacturing (Ford Motor Co., 2017).
As the industry continues to evolve, the need for continuing education is critical. Workers will need to upgrade their existing skills with those related to xEV technology. Examples of in-demand skills include data analysis, computer programming, software design, cybersecurity, systems thinking, and knowledge of electric or alternative fuel vehicles.
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