A roadmap for Michigan’s electric vehicle future

An assessment of the employment effects and just transition needs

Chapter 3

Results: The employment effects of an all-electric future for Michigan

In this section, we present the results of our modeling analysis. Before getting into the results, we first explain where employment stood in Michigan before the transition began. Then, we discuss the results of the All Electric by 2033 scenario by sector. After the sector-by-sector breakdown, we discuss the combined results for 
all modeled sectors.

Unsplash/Carlos Aranda

We did additional analysis beyond our modeling, so we then provide employment insights on sectors not included in the model. Finally, we provide overall takeaways from the results. Appendix D, Tables D-1–D-10, presents full employment results for the All Electric by 2033 scenario, as well as a Current Policy scenario, which we briefly discuss in Box 3.

Michigan is home to a variety of jobs in the auto industry and related economic sectors. Figure 10 breaks down employment by category in 2019. Note that this report’s modeling analysis focuses only on employment for light-duty vehicles, while the data in Figure 10 include light-, medium-, and heavy-duty vehicles. However, the figure gives an indicative sense of the level of employment and the types of professions in various sectors.

Motor vehicle and parts manufacturing was by far the largest employer, comprising around 174,000 jobs in 2019. Of these, around 37,000 jobs were in vehicle assembly; 9,000 were in body and trailer manufacturing; and 129,000 were in parts manufacturing, including transmissions, engines, steering, brakes, and electrical components (IMPLAN 2021). Parts manufacturing is reflected in indirect jobs effects in this report’s modeling analysis.

After manufacturing, motor vehicle repair and maintenance was the second-highest category, with around 64,000 jobs. Motor vehicle and parts dealers (around 30,000 jobs), motor vehicle and parts wholesalers (around 23,000), and gas stations (around 22,000) were also significant employers. There are no data on the number of jobs in EV battery manufacturing in 2019, though we know there was a limited amount of employment in storage battery manufacturing. Data are unavailable on the number of workers in vehicle research and development, but for context Michigan has around 80,000 workers in all scientific research and development services, not just vehicles (IMPLAN 2021).

Figure 10 | Pre-transition employment breakdown in Michigan

Note: “Motor vehicles” encompass light-, medium-, and heavy-duty vehicles.

Source: IMPLAN 2021 for employment levels; BLS 2023 for examples of specific professions.

Results by segment of the automotive value chain for the All Electric by 2033 scenario

In this section, we go sector by sector to present the employment results of our modeling analysis of the All Electric by 2033 scenario, focused on light-duty EVs. We first cover the auto manufacturing results, which depend on whether Michigan achieves the High or Low Competitiveness case. Then, we discuss the segments of the automotive value chain that depend on the number of EVs on the road in Michigan—for example, EV charging infrastructure and auto maintenance and repair—and which, therefore, do not change depending on the level of manufacturing competitiveness.

All results are presented in comparison to a reference No Transition scenario in which a transition to EVs does not occur and Michigan’s share of battery and automotive manufacturing remains at present day levels. The results include direct, indirect, and induced jobs. Direct jobs are positions employed within a specified sector, indirect jobs are those associated with the supply chain of that sector, and induced jobs are created when direct and indirect workers spend their earnings in the wider economy.

Figure 11 | Auto manufacturing jobs in the All Electric by 2033 scenario

Source: Authors.

Automotive manufacturing

The EV transition will lead to net job gains for Michigan’s auto manufacturing if the state enacts the right policies and is able to secure a sufficient share of the nation’s automotive and battery manufacturing value chain, as in the High Competitiveness case. However, if Michigan loses market share, as in the Low Competitiveness case, it could lose auto manufacturing jobs.

We first present results for auto manufacturing as a whole. Then, because of the salience of EV battery manufacturing in policy considerations, we present the auto manufacturing results in two parts—one that covers EV battery manufacturing, and one that covers all other aspects of auto manufacturing.19

High Competitiveness case

In the High Competitiveness case, Michigan increases its share of US auto manufacturing from 20 percent today to 25 percent by 2030 and increases its share of US battery manufacturing from 10 percent today to 15 percent by 2030.

In the High Competitiveness case, the EV transition would have a net positive effect on Michigan’s auto manufacturing employment. Michigan would have 17,000 more direct jobs in auto manufacturing and 12,000 more indirect jobs in the supply chain in 2030 compared with the No Transition scenario. In addition, the ripple effect of these workers spending their earnings would create 27,000 induced jobs in the wider economy. In total, the effect would be 56,000 additional jobs in 2030 compared with the No Transition scenario, which would decline to 41,000 additional jobs in 2040.20

Within these results, there are different dynamics for battery manufacturing and the rest of auto manufacturing. In the High Competitiveness case, the total annual value of Michigan’s battery production grows fiftyfold from $130 million to $6.7 billion from 2024 to 2040 and the total annual value of the rest of Michigan’s auto manufacturing grows by 27 percent in the same period. Battery manufacturing jobs grow steadily until 2033, when 100 percent EV sales are reached, and then remain at a similar level going forward. The rest of auto manufacturing except batteries grows compared with the No Transition scenario from 2024 to 2029, spurred by the fact that a higher proportion of EV assembly will likely be done in the United States compared with that of ICE vehicles due to the North America content requirements of the IRA. Then, around 2030, these jobs begin to decline, as the costs and labor needs of EV production go down, given that EVs are easier to assemble, and thus overall spending in the sector decreases.21 This is more than offset by the battery production job gains, so the overall effect is still positive in 2040 but lower than it was in 2030.

The year-by-year results are presented in Figure 11. In 2030, battery production in Michigan would be responsible for 14,000 direct jobs, 5,000 indirect jobs in the supply chain, and 15,000 induced jobs in the wider economy compared with a No Transition scenario. Together, the total effect would be 34,000 additional direct, indirect, and induced jobs in 2030 and 42,000 in 2040. The rest of auto manufacturing other than battery manufacturing would support 4,000 additional direct jobs, 7,000 indirect jobs in the supply chain, and 12,000 induced jobs in the wider economy in 2030 compared with the No Transition scenario. The total effect in 2030 would be 23,000 additional jobs. Later on, in 2040, the number falls to 2,000 jobs below the No Transition scenario, for the reasons described above.

Note that our modeling assumes battery manufacturing experiences average labor productivity gains over the time period, but given it is an early-stage industry, it could be that battery manufacturing becomes automated faster than other industries as battery prices come down, which would reduce the job creation impact. In addition, very little of the battery supply chain is currently in Michigan and our model assumes that it stays roughly the same; however, if more of the battery supply chain moves to Michigan it would increase the number of indirect jobs.

Low Competitiveness case

Under the Low Competitiveness case, Michigan decreases its share of US auto manufacturing from 20 percent today to 15 percent by 2030 and decreases its share of US battery manufacturing from 10 percent today to 5 percent.

In the Low Competitiveness case, the EV transition would have a net negative effect on Michigan’s auto manufacturing employment. Michigan would have 4,000 fewer direct jobs in auto manufacturing and 15,000 fewer indirect jobs in the supply chain in 2030 compared with the No Transition scenario. This would lead to 28,000 fewer induced jobs in the wider economy. The total effect from all of these would be 47,000 fewer direct, indirect, and induced jobs in 2030, and 49,000 fewer jobs in 2040.

The reason that there are net job decreases in the Low Competitiveness case is because while there would be some increases in battery manufacturing jobs, they would be smaller than in the High Competitiveness case, and would be outweighed by the declines in the rest of auto manufacturing. The annual value of Michigan’s vehicle production would shrink by 11 percent from 2024 to 2040, while the value of its battery production would grow thirteenfold from $167 million to $2.24 billion. In 2030, employment in battery manufacturing would increase by 5,000 direct jobs, 2,000 indirect jobs in the supply chain, and 6,000 induced jobs in the wider economy, compared with the No Transition scenario. That amounts to 13,000 additional jobs. For all other aspects of auto manufacturing except batteries, in 2030 there would be 10,000 fewer direct jobs, 17,000 fewer indirect jobs in the supply chain, and 33,000 fewer induced jobs in the wider economy. This amounts to a total of 60,000 fewer jobs in 2030 compared with the No Transition scenario, and the effect would stay roughly the same through 2040.

Battery manufacturing and other auto manufacturing should always be considered together when planning for the EV transition. While some components of vehicles will remain the same, EVs will have new elements and production processes. Whether ICE vehicle manufacturing and parts workers are able to transition to EV manufacturing roles including battery manufacturing is contingent on retraining efforts that must align training timelines with growing demand for EV production. In the Low Competitiveness case, where there are net job losses, some employees would need to transition to a role outside the automotive industry in the rest of Michigan’s growing economy. Even in the High Competitiveness case, where there are net job gains in auto manufacturing, as skillsets and production processes are not the same, the transition will require retraining and potentially relocating to other sectors and early retirement in some cases. Many of the jobs effects in manufacturing occur quite quickly, but much of the skills and sectoral transition could be addressed as part of normal patterns of retirement, as auto manufacturing workers in Michigan are older than the national average (Box 2). For Michigan to be successful in increasing its share of auto and battery manufacturing, as is assumed in our High Competitiveness case, it will also need to foster the talent pool necessary to create the next generation of electric vehicles.

Our recommendations later in this report on “Innovation-oriented economic development policies” and “Quality job creation and just transition policies” outline the policy responses needed to grow the state’s EV-related industry and the required workforce, create quality jobs, and ensure that the transition does not leave its longtime autoworkers and communities behind. In particular, it will be critical to ensure quality job creation that offers family-sustaining wages, security, and potential for growth in the growing battery manufacturing sector. For example, at present, one GM joint venture plant in Ohio offers battery workers a maximum of $22 an hour compared with the $32 hourly wage of a unionized traditional vehicle assembly worker (Coppola 2022a).

Box 2 | Demographics in auto manufacturing

Auto manufacturing workers in Michigan are older than the national average for other industries. This has important implications when considering the effect of our scenarios on auto manufacturing jobs and skills requirements.

Of light-, medium-, and heavy-duty vehicle manufacturing workers in Michigan, 25 percent were 55 and older in 2019. These workers would be more than 65 years old, a typical retirement age, in 2030. Fifty-two percent of vehicle manufacturing workers in Michigan were 45 and older in 2019 and thus would be more than 65 years old in 2040.a There were about 175,000 jobs in light-, medium-, and heavy-duty motor vehicle and parts manufacturing in Michigan in 2019.b Applying these ratios reveals that approximately 43,000 Michigan auto manufacturing workers will reach retirement age by 2030 and 91,000 by 2040.

These numbers cannot be directly compared to the results of our All Electric by 2033 scenario analysis given the mechanics of our modeling and our focus on light-duty vehicles in particular, but they provide useful insight. In our Low Competitiveness case, where there are auto manufacturing job losses, it is likely that attrition by retirement when employees reach 65 would be able to account for a large portion of the changes. In the High Competitiveness case, where there are auto manufacturing job gains, the patterns of retirement are still relevant as the industry shifts to new skillsets.

It is important to note that not everyone wants to retire at age 65, and that patterns of job gains and job losses will not always follow the same timeframes as retirement trends. Michigan government and automakers should explore designing early retirement packages to ensure that turnover in the auto industry is as smooth as possible. See “Innovation-oriented economic development policies” below for full recommendations.

Notes and sources: a. Census Bureau n.d. We used age data from the US Census Bureau, which are not exactly the same as the data from IMPLAN that we used for our DEEPER modeling, but the numbers are close enough that using them for this back-of-the-envelope analysis is valid. We used Census Bureau data from 2019 even though more recent data exist to ensure that the Census Bureau data are more comparable with the 2019 IMPLAN data we had available for modeling; b. IMPLAN 2021.

EV charging infrastructure

To support the EV transition, Michigan will have to build out large amounts of public EV charging infrastructure and support at-home charging. Our analysis found that a cumulative $9 billion in public and private investment will be needed for construction and operation of public charging from 2024 to 2040, which is on average $510 million per year. In 2040, we found that around 7,500 jobs would be created due to the installation and operation of EV charging stations to power the EVs that would be on Michigan’s roads. This includes 4,000 direct jobs, 700 indirect jobs in the supply chain, and 3,000 induced jobs in the wider economy. Over time, more of the jobs effects will shift from EV charging infrastructure installation to operations including maintenance and repair. We did not assess the jobs effects from the manufacturing of EV charging equipment, which could be a job creator too depending on whether it takes place in Michigan.

Multiple types of workers will be needed for the planning, construction and installation, and operations and maintenance phases of EV charging infrastructure. Many of these jobs will be an extension of existing employment sectors but will require additional training and certifications (Carr et al. 2021). For instance, charger installations will require electrical workers who are trained to handle and safely install high-powered electrical equipment. It will be important that building charging infrastructure for EVs creates good jobs. Our “Recommendations for Michigan policymakers” identifies ways to achieve that aim.

Gasoline stations

Gas stations will experience lower demand as EV owners switch from using gasoline to electricity to fuel their vehicles, affecting employment. Our simulations show approximately 20,000 gas station–supported jobs would be lost by 2030 and 46,000 by 2040, compared with the No Transition scenario. In 2040, this includes 25,000 direct jobs at gas stations, 8,500 indirect jobs in the supply chain, and 13,000 induced jobs effects in the wider economy. The effect on indirect jobs in the supply chain is relatively low considering that Michigan is not home to a substantial amount of oil and gas extraction or refining.

Our modeling also does not account for the consideration that some gas stations could be repurposed as EV charging stations so that some workers may remain employed at vehicle refueling stations that shift to selling electricity.22 Accordingly, the model estimates that practically all of Michigan’s direct gas station jobs would be lost by 2040. Given that the majority of EV charging will take place at home, there will certainly be less demand for public fueling facilities. But that doesn’t mean that there won’t be some possibility of gas stations transforming themselves. For instance, as companies shift to zero-emission fleets, gas stations could be in a position to take advantage of business opportunities presented by EV charging for large business fleets, providing both on-the-go and at-depot charging (Bau et al. 2021).

Jobs in Michigan’s gas stations have relatively low wages, about 40 percent of the national average wage for all economic sectors (BLS 2021c). Current economic trends also indicate that gas station jobs are particularly likely to become automated, with the US Bureau of Labor Statistics projecting that automation will especially impact cashiers, such as those employed at gas stations (Begley et al. 2019; BLS 2022a). Therefore, the job losses in gasoline stations should be interpreted within the broader context of ongoing automation. The transition away from gasoline could also be an opportunity for workers to reskill, upskill, or shift to jobs of equal or greater quality—if Michigan implements appropriate workforce transition policies.

Electricity

There will be job gains from electricity generation, transmission, and distribution as more spending is directed toward electricity to power EVs. In Michigan, electricity-supported jobs will be 4,200 higher in 2030 compared with the No Transition scenario, and 12,000 higher in 2040 compared with the No Transition scenario. Of these jobs effects in 2040, 1,500 are additional direct jobs, 3,000 are indirect jobs in the supply chain, and 7,000 are induced jobs in the wider economy. Our modeling does not consider the jobs effects of the decarbonization and expansion of the electric grid to meet increased demand, which could create additional jobs as well as increase the climate benefits of EVs.

In addition, the cheaper costs of fueling EVs compared with ICE vehicles allow households to accrue savings, which is a benefit in itself and creates jobs when those savings are spent in other parts of the economy (discussed below).

Maintenance and repair

EVs are expected to require less maintenance and repair than ICE vehicles, which will significantly impact the automotive repair and maintenance workforce. Lower labor needs for auto maintenance and repair will also affect auto dealers, given that roughly a third of car owners go to dealerships for maintenance and repair (Finlay 2021). In 2030, our modeling shows there would be around 11,000 fewer jobs supported by auto maintenance and repair in Michigan and, by 2040, 26,000 fewer jobs compared with the No Transition scenario. Of these effects in 2040, approximately 13,000 are direct maintenance and repair jobs, 2,500 are indirect jobs in the supply chain, and 10,000 are induced jobs in the rest of the economy. Maintenance and repair job losses would be diffused throughout the state. Like with job losses in gas stations, maintenance and repair job losses would not be unique to Michigan, given that all states transitioning to EVs will experience these types of job losses.

Net savings re-spending

EVs are going to be cheaper to own and operate than ICE vehicles over their lifetimes (ANL 2022). There will be an increase in jobs when consumers save money on EVs and re-spend that money to support jobs in the rest of the economy. These savings total $39.5 billion for Michiganders from 2020 to 2024, or about $2.3 billion a year. By 2030, our model shows this effect could lead to 8,500 jobs, and by 2040 around 27,000 jobs across Michigan.

While the estimates here are based on average consumer spending, wealthier groups that are early adopters of EVs tend to save more and lower-income groups tend to spend a higher share of their incomes (Fisher et al. 2019). This means policies to ensure equitable EV deployment could improve Michigan’s job gains by helping early savings accrue to lower-income groups. Moreover, if consumers direct spending to investments in education or other long-term economic growth opportunities, it could significantly increase employment gains associated with the transition.

Combined results for the All Electric by 2033 scenario

To understand the scale of the various sectoral transformations, in Figure 12 we combine the jobs effects from all sectors modeled and discussed above. Due to modeling and time limitations, we were not able to include the jobs effects of a shift to renewable energy to support EVs or the jobs effects of the IRA’s EV tax credit savings. These are covered in the following section.

Under the High Competitiveness case, for these modeled sectors Michigan would see a net increase in jobs compared with a No Transition scenario. In 2030, Michigan would have an additional 47,000 direct, indirect, and induced jobs compared with the No Transition scenario (Figure 12). By 2040, the effect would be lower, but it would still be a net gain of around 9,000 jobs compared with the No Transition scenario. On average, there would be 27,000 additional jobs per year supported over the 2024–40 timeframe.

Under the Low Competitiveness case, direct, indirect, and induced jobs in 2030 for these modeled sectors would be 56,000 fewer than what would occur under the No Transition scenario (Figure 12). By 2040, employment would be about 80,000 fewer than in the No Transition scenario. On average, there would be around 57,000 fewer jobs per year supported over the 2024–40 timeframe.

The difference between the two cases is driven entirely by auto manufacturing, which has a net gain in the High Competitiveness case and a net loss in the Low Competitiveness case. Beyond manufacturing, many other sectors of Michigan’s economy are impacted. On the positive side, the transition yields employment gains from re-spending of household savings from the cheaper total cost of EV ownership, the installation and operation of EV charging equipment, and electricity purchases to fuel EVs. Employment losses occur due to the phase out of gasoline, the reduced need for maintenance and repair work, and cheaper EVs requiring less financing than more expensive ICE vehicles. Importantly, paying less for fuel, needing less automotive repair work, and paying lower purchase prices for vehicles also reflect improvements in household quality of life, captured here by the re-spending of household savings.

Figure 12 | Combined jobs impacts of the All Electric by 2033 scenario in Michigan

Note: EV = electric vehicle.

Source: Authors.

The High and Low Competitiveness cases depict a range of outcomes that Michigan could realize under an All Electric by 2033 scenario. This range is from around 47,000 more net jobs supported on average in 2030 compared with the No Transition scenario (in the High Competitiveness case) to around 56,000 fewer net jobs supported on average per year compared with the No Transition scenario (in the Low Competitiveness case). Whether Michigan ends up on the high end or low end of this spectrum depends on whether Michigan acts now to put in place the right policies to be a leader in EV manufacturing going forward. In addition, Michigan will need to implement the right policies to support its broader economy.

Box 3 | The speed of the EV transition will influence the magnitude of the shifts in jobs

In this section, we present the impacts of an ambitious All Electric by 2033 scenario. We also analyzed a Current Policy scenario based on national trends, in which EVs make up a little over 50 percent of light-duty vehicle sales in 2030 and around 90 percent in 2040, which is not as ambitious as the All Electric by 2033 scenario but still represents a substantial change from today. The assumptions and results of the Current Policy scenario can be found in Appendices C and D. The jobs effects of the EV transition follow the same overall pattern in both the All Electric by 2033 scenario and the Current Policy scenario. However, in the All Electric by 2033 scenario the jobs transition would happen faster than in the Current Policy scenario. Thus, in the All Electric by 2033 scenario there is a need for more and faster policies to help legacy auto workers and communities adjust. Pursuing more ambitious action to reach net-zero emissions is necessary to limit climate change, which will otherwise harm the health and well-being of all people in Michigan. The air pollution reduction from zero-emission transportation alone would result in $51 billion in health benefits from 2020 to 2050.a In the long run, the magnitude of the job shifts in auto manufacturing in Michigan will pale in comparison to the economic damages from the growing impacts of unchecked climate change.b

Notes and sources: a. ALA 2022a.; b. Reidmiller et al. 2018.

Insights on aspects not included in the model

Renewable energy

While we didn’t include renewable energy in our modeling analysis due to time and modeling constraints, renewables are a big potential job creator for Michigan. A US analysis has found that investing $1 million in solar energy supports 2.7 times as many jobs as investing the same amount in fossil fuels (Garrett-Peltier 2017). Therefore, we conducted a back-of-the-envelope calculation to illustrate the potential impact of the clean energy transition for Michigan. We took projected growth in electricity demand across sectors from the reference, or business-as-usual, scenario of the EIA’s Annual Energy Outlook, and electrification of passenger vehicle sales in line with our All Electric by 2033 scenario. We analyzed the effect of Michigan’s shifting its current capacity mix of about 25 percent renewable energy to 80 percent renewable energy by 2040. In this setting, the transition to electric vehicles would support over one-fifth, or about 7,600 jobs a year, of the employment created due to the renewable energy shift. This includes only construction jobs, though more jobs would be created in planning, designing, financing, operating, and maintaining renewable energy infrastructure. It does not include the economic impacts of the ways used to pay for the infrastructure.

Health and climate benefits

The transition from gasoline- and diesel-powered vehicles to EVs will reduce greenhouse gas emissions and other dangerous pollutants like sulfur dioxide, nitrogen oxides, particulate matter, and volatile organic compounds, which will improve the health of Michiganders (Carey 2023). In 2021, Michigan’s air quality was ranked 33rd lowest in the nation as measured by exposure to small particulate matter (UHF 2022). Our modeling did not estimate the value of health and climate benefits attributable to a transition to EVs and a cleaner grid, but other research highlights these important benefits. Recent analysis by the American Lung Association estimated that from 2020 to 2050 Michigan would realize approximately $51.4 billion in public health benefits, 4,700 avoided deaths, 97,400 avoided asthma attacks, and 466,000 avoided lost workdays through a shift to zero-emission transportation (ALA 2022a). Nationwide, a person of color is 61 percent more likely than a white person to live in a community impacted by unhealthy air, in part due to traffic patterns (ALA 2022b). This indicates the potential for significant improvements in health equity through vehicle electrification. Given the scale of these benefits, it is important for policymakers to account for these gains when considering policies to support vehicle electrification.

Another analysis found that if the Michigan Healthy Climate Plan is fully implemented, it could enable the state to reduce greenhouse gas emissions by more than 50 percent by 2030 (5LE et al. 2022). While the plan includes several strategies to help Michigan meet its climate goals, the analysis found that setting an EV sales goal of 50 percent for LDVs and 30 percent for heavy-duty EVs is one of the most significant drivers of emissions reduction in the plan along with implementing a clean electricity standard, phasing out coal-fired plants by 2030, and building efficiency and electrification.

Benefits of IRA tax credit savings

We incorporated the IRA’s EV tax credits into our main modeling scenarios in terms of how they affect domestic content in auto manufacturing and the number of EVs sold, but due to modeling constraints we analyzed the consumer savings separately in a back-of-the-envelope analysis. Under the All Electric by 2033 scenario, we found that Michigan consumers stand to save at least $8.7 billion from 2024 to 2032 due to the EV and battery production tax credits in the IRA, and as much as $18 billion depending on how many vehicles qualify for the credits. The re-spending of the minimum level of savings would support an estimated 15,000 jobs in 2032, in addition to the jobs effects due to savings from the lower price and ownership costs of EVs reflected in our main modeling. Combined with the employment impacts of the High-Competitiveness All Electric by 2033 scenario, this amounts to a net gain of 55,700 jobs in 2032 compared with a No-Transition scenario (Figure 13). This estimate does not include savings from the EV tax credit for used cars, savings from 2022 to 2023, or the employment generated by the share of consumer savings spent outside Michigan. These calculations rely on an analysis by Energy Innovation (Baldwin and Orvis 2022) that estimated the expected value of the tax credits per vehicle sold, given that many vehicles would not qualify for the full $7,500 credit, and that only a portion of the battery production tax credit would be passed on to consumers. For the full methodology, see Appendix C.

Figure 13 | Effect of IRA tax credit savings on jobs impacts of the All Electric by 2033 scenario—High Competitiveness case

Note: IRA = Inflation Reduction Act.

Source: Authors.

Overall takeaways from the results

If Michigan implements the right policies and increases its share of domestic auto production to 25 percent and its share of domestic battery manufacturing to 15 percent, an ambitious EV transition consistent with net-zero emissions would have a net positive effect on Michigan’s employment in auto manufacturing and EV-related sectors—equivalent to 47,000 more direct, indirect, and induced jobs than a No Transition scenario in 2030. On the other hand, if Michigan’s share of auto and battery production decreases, the state stands to lose jobs in the automotive supply chain.

There are big job opportunities in the transition to EVs, including in battery manufacturing, EV charging infrastructure, net savings from EVs being cheaper, and modernizing and adding renewable energy resources to the electric grid. These job gains can counterbalance losses in ICE manufacturing, auto maintenance and repair, and gas stations. This means that Michigan needs to consider forward-looking policies that will make it an attractive destination for companies in the EV industry. This is a race to the top, not a race to the bottom, so Michigan should also ensure that the jobs created are high quality.

However, the effects are going to be uneven, with job losses in some segments of the automotive value chain and gains in others. Michigan needs to ensure that the transition does not leave its longtime autoworkers and communities behind. Our modeling does not have a geographic component to it, but it is important to note that Michigan’s motor vehicle and parts manufacturing is heavily concentrated in and around the Detroit region, covering Macomb, Wayne, and Oakland Counties. This geographic concentration could increase the impact on the workers and communities if there are losses in jobs, tax revenue, or support for public services (Raimi et al. 2022). The Detroit region is beginning to attract EV and battery investments, but the exact impact remains to be seen, and further research is needed on this topic.

It’s important to consider Michigan’s broader economy to see whether it has the capacity to adapt. An analysis from Woods & Poole Economics based on broad economic trends in Michigan’s economy forecasts that the state will add approximately 585,000 more jobs by 2030 and 880,000 more jobs by 2040 (W&PE 2022). That overall job growth is much larger than the auto manufacturing net jobs effects of the EV transition in either the High Competitiveness (56,000 more jobs in 2030 versus the No Transition scenario) or the Low Competitiveness case (47,000 fewer jobs in 2030 versus the No Transition scenario) (Figure 14). If the transition is handled right and Michigan enacts the right policies, there is a real opportunity for the workers in the auto sector to shift to other parts of Michigan’s economy.

As Michigan advances its economy, attracting and retaining talent, investing in energy productivity, and increasing domestic content, it can thrive as a state in the coming years.

Figure 14 | Auto manufacturing jobs effects of the EV transition are small compared with Michigan’s projected overall employment growth

Note: Our scenario jobs effects include direct jobs, indirect jobs in the supply chain, and induced effects in the wider economy.

Source: Authors. Michigan economy-wide employment gains for 2021–30 from W&PE 2022.

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