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Electric vehicle manufacturing could cut auto parts trade in the US Midwest

The U.S. electric vehicle race is heating up as new rounds of investment come in from Washington. The workers of the former center of the automotive industry are afraid of being left behind.

“If we look closely at what’s happening on the factory floor, there won’t be fewer workers,” Keith Cooley, former head of the Michigan Department of Labor, told CNBC. “There will be different people who will build cars.”

The researchers believe that today’s factory jobs will require more education and may be less affordable than in the past. They estimate that the production of electric vehicles could require 30% less labor compared to conventional cars. “Pipes that pull oil or gas around an internal combustion engine will not be there,” Cooley said.

This change could hit auto parts suppliers, many of whom are concentrated near Midwestern cities such as Kokomo, Indiana; Lima, Ohio; and Detroit, Michigan.

“The auto companies in some of these places actually make up a decent share of the tax revenue, and they employ a lot of people in the surrounding community,” Sanya Carly, Indiana University professor and contributor Industrial centre study, told CNBC. “So the fate of these companies is very closely linked to the fate of the communities.”

Leaders in Washington are hoping that two key pieces of legislation, the Inflation Reduction Act and the Chips Act, which were signed into law by President Joe Biden in August, will provide a bridge to that future. These laws provide billions of dollars in incentives for businesses involved in the production of clean energy.

As funding is in the pipeline, automakers are now wondering how quickly demand for electric vehicles will materialize. In 2021, 9% of global car sales were electric vehicles, according to the International Energy Agency.

Look video to learn more about how the electric vehicle revolution will impact the economies of the US Midwest.


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