A roadmap for Michigan’s electric vehicle future

An assessment of the employment effects and just transition needs

Chapter 4

Recommendations for Michigan policymakers: Seizing opportunities, addressing challenges

In this chapter, we present a tripartite framework of policy recommendations that can help Michigan to grow its EV industry, create high quality jobs, and accelerate EV adoption, while ensuring that the transition does not leave longtime autoworkers and communities behind.

Dominick Sokotoff

It is critical for Michigan to seize opportunities for quality job creation and economic growth while addressing challenges facing longtime autoworkers and communities from the EV transition through the adoption of forward-looking policies. For this reason, we propose a tripartite framework of policy goals, with equity at the core of all policy considerations (Figure 15). The three categories center around how Michigan can attract robust EV-related investments and talent, deploy the necessary infrastructure to support widespread EV adoption, and create quality jobs while supporting workers and communities during the transition to ensure an equitable outcome.

Figure 15 | Policy goals to grow Michigan's EV industry and drive a just and equitable EV transition

Source: Authors.

For each policy goal, we present a suite of recommendations, including some that are already under consideration by Michigan policymakers. These goals and recommendations are not ordered by any priority; rather, we believe that Michigan will need to focus on all three policy categories simultaneously. Additionally, Appendix F provides examples from other states of promising policies and programs to grow the EV industry and achieve the transition in a just manner, which may prove helpful for Michigan.

In addition to the recommendations highlighted in this section, Michigan should pursue federal funding available through the IIJA, CHIPS Act, and IRA to decarbonize its transportation sector. Michigan can leverage the most out of these opportunities by aligning key state goalposts with the expiration of federal funding provisions—for example, by bringing forward its fleet electrification target from 2035 to 2032 to take advantage of the IRA’s EV tax credits. See Appendix B for programs and funding listed under each piece of legislation that Michigan can qualify for. In addition, Michigan’s Office of Future Mobility and Electrification should be entrusted with the responsibility of assisting in-state original equipment manufacturers and other businesses in the EV ecosystem to navigate the IIJA, CHIPS Act, and IRA so that they can take advantage of funding opportunities and support in-state economic development. OFME should become a go-to resource for information on federal tax credits, grants, and loans.

As described in “Approach: Understanding EV just transition needs,” the policy recommendations in this report are the result of a review of best practices backed by academic literature, a survey of Michigan’s ongoing initiatives in this area, and targeted consultations with stakeholders impacted by and involved in the ongoing transformation of the automotive sector.

Innovation-oriented economic development policies

Develop the workforce pipeline for the EV industry

The varied educational and training needs of the EV workforce will require Michigan to adopt distinct strategies to assess, prepare, and train workers across the EV value chain; this includes targeting high-wage and high-skilled jobs in research, design, and development as well as blue-collar and technical workers (Agrawal et al. 2022). The most effective workforce development strategies are those that collaborate with the private sector; pay attention to job quality; build broad skills for an occupation rather than a specific technology; and continually monitor program outcomes such as job placement rates, wages, benefits, worker productivity, and ongoing commitment by employers (Zabin 2020).

Key recommendations:

  • Track labor market dynamics across the entire automotive value chain and over time to align job demand and labor supply. Michigan will need to consider which types of occupations are needed, whether existing occupations can extend into the EV industry or new skills will be needed, how many jobs will be required, how those jobs will be distributed across the automotive value chain, and how labor supply and demand can be matched, among other considerations.
  • Support industry-led worker training partnerships. Industry-led training partnerships bring business leaders from an industry—best positioned to understand workforce needs—together with local workforce and economic development organizations, labor organizations, educational institutions, and community organizations to address workforce needs. The EV Jobs Academy and Mobility Talent Action Team are two examples where Michigan is currently doing this. Michigan can further ensure that such initiatives cover workforce needs across the entire automotive value chain, including in charging infrastructure and battery R&D and manufacturing. Targeting such programs to benefit low-income communities, women, and other groups that are underrepresented in the sector is important to making sure that diverse groups of people benefit from these opportunities.
  • Support existing apprenticeship and pre-apprenticeship programs and create new ones where needed. Apprenticeships are industry-driven programs where individuals obtain paid on-the-job training combined with classroom instruction and a nationally recognized credential, helping employers and relevant labor stakeholders prepare their future workforce (Hauge and Baddour 2020; Zabin 2020; Walter et al. 2020). Pre-apprenticeships are short programs that help individuals enter and succeed in registered apprenticeships. Apprenticeships and pre-apprenticeships are crucial for engaging underrepresented populations, allowing them to earn money without having to choose between work and school, and providing them with a pathway to employment in high-quality jobs. Box 4 highlights a promising state example of an apprenticeship program.
  • Track outcomes of all workforce and training programs. Michigan should systematically track workforce outcomes to evaluate and improve state-funded workforce programs. While tracking can be expensive and time-consuming, it can ensure that public investment in such programs provides the best outcome for both workers and employers. Michigan can consider third-party studies and evaluations that assess workforce outcomes using a broad range of criteria.
  • Develop curriculum upgrades in postsecondary institutions focused on occupations that are critical for the transition to EVs. Michigan’s community and four-year colleges are developing curricula to prepare students for careers in the EV industry, such as the new EV training center at the University of Michigan, Ann Arbor (Nagl 2022). Building on this, Michigan should develop and maintain a database of existing EV-related educational offerings across its postsecondary institutions and match those to industry needs to identify gaps and further opportunities for curriculum development. Michigan’s EV workforce can also benefit from additional academic programs and concentrations in next-generation technologies such as data analytics, machine learning, artificial intelligence, and cybersecurity.
  • Introduce middle and high school students to careers in the EV industry. Providing middle and high school students with opportunities to understand the fundamentals of the EV industry can help spark students’ interest in pursuing a career in science, technology, engineering, and mathematics (STEM). Furthermore, as students become excited about EVs, they can educate their families and friends and help accelerate the widespread adoption of EVs. North Carolina State University offers the Sustainable Transportation Education Program, which helps middle and high school teachers with curriculum and professional development to teach their students about sustainable transportation and EVs.23

Box 4 | Apprenticeships as a strategy to build access to quality jobs

Siemens and Wake Technical Community College (WTCC) have launched a new apprenticeship program to meet employment demand in EV charging manufacturing, engineering, and research and development in Siemens’ eMobility manufacturing hub in Wendell, North Carolina. During the four-year program, which starts in the 11th grade, students will attend classes part-time and receive on-the-job training from Siemens while earning a paycheck. Siemens will provide input to WTCC for curriculum development. Upon completion, apprentices will receive an associate’s degree from WTCC, a journeyman apprenticeship certificate from the state, and have an opportunity for full-time employment at Siemens. The program is registered with ApprenticeshipNC.

Source: McIntosh 2022.

Bolster Michigan’s innovation ecosystem to attract corporate headquarters and R&D facilities

The growing EV industry is likely to see significant innovation and technological advancements including in the development and improvement of different battery technologies, vehicle-to-grid systems, wireless and ultra-fast charging, and even electrified roads. Michigan should bolster its innovation ecosystem so it can attract both corporate headquarters and R&D facilities as well as high-tech talent to support the digital and knowledge-based jobs of the EV and mobility industry. This will be crucial for driving economic growth, creating high-wage jobs, and increasing global competitiveness and productivity while positioning Michigan as the hub of EV-related R&D and manufacturing (Ezell and Andes 2016; Tharpe et al. 2020). Michigan should also avail itself of all opportunities to link these efforts to achieving its goals around diversity, equity, and inclusion.

Key recommendations:

  • Provide greater public investment in higher education to strengthen the state’s skills base. Michigan’s support for higher education per full-time-equivalent student is among the lowest in the country (NSF 2022). This has significant ramifications for Michigan businesses looking to hire educated graduates. The education budget for fiscal year 2023 includes a significant increase in higher education funding but is not enough to reverse the last two decades of disinvestment (Affolter-Caine 2022). In addition to attracting talent from outside state borders, Michigan must invest more in higher education and graduate more students for businesses to have the talent they need. Although Michigan has announced an ambitious goal for 60 percent of its adults obtaining a postsecondary degree or an industry-recognized credential by 2030, significant policy innovation and systemic education reform are needed for the state to reach this goal.24 It will require more investment to provide the needed support to students, including by making college more affordable and providing financial and academic support so that students are able to finish college (Steel 2022). The proposed fiscal year 2024 budget includes several proposals to boost K-12 and higher education in the state, which if passed by the state legislature will further enable Michigan to revamp its lagging education system (OOTG 2023). This includes a proposal to lower the age for free community college tuition under Michigan Reconnect from 25 to 21 and increase investment in the Michigan Achievement Scholarship, which provides tuition assistance to high school graduates to attend a community college or four-year public university.
  • Invest in programs to attract and retain STEM students. A recent analysis found that Michigan has nearly 14 percent fewer graduate students living in-state than are produced by its institutions of higher education (Conzelmann et al. 2022). In comparison, several other states including Colorado, California, Georgia, Illinois, Minnesota, and Washington are home to more graduates than they produce themselves. With the expected growth in the EV industry, Michigan should consider putting in place incentives to attract and retain high-tech talent including software engineers and computer scientists. Some options include providing a STEM-graduate tax credit, remote worker incentives, or reverse scholarships—the last of which provides scholarships to students toward the end of their college careers if they agree to work in-state. Connecticut has a Governor’s Innovation Fellowship program that provides qualifying graduates with STEM backgrounds with a $5,000 fellowship grant and matches them with tech companies in Connecticut (CTNext 2021).
  • Strengthen business R&D in the state. Michigan should consider providing business R&D tax credits to incentivize companies to do cutting-edge research in the state, a strategy that has generally been found to be effective in encouraging R&D investment by domestic and foreign firms in the United States (Appelt et al. 2016; Billings et al. 2020; Tyson and Linden 2012).25 Michigan can also consider limiting the credit to new and emerging businesses, providing small firms with larger credit, or restricting the credit to technologies the state is interested in nurturing (Tyson and Linden 2012; CFME 2021).
  • Facilitate greater interaction and connections among companies, research universities, national laboratories, and the Department of Energy. Bigger companies in the automotive industry have more access to resources and the ability to stay abreast of available opportunities and emerging technologies. Small and midsize companies and startups may find it difficult to find support for their innovative ideas. Michigan’s OFME can communicate and coordinate with industry to help them connect to and access resources from Michigan’s research universities, the national laboratories, and DOE.

Protect and bolster Michigan’s EV manufacturing competitiveness

As US states vie for leadership in building the EV industry, Michigan should consider strategies that enable it to remain competitive for EV and battery manufacturers, especially as it adapts its decades-long automotive strengths from ICE vehicles to EVs. Electrification may be particularly disruptive for automotive parts manufacturers, which are the backbone of Michigan’s auto industry.26

Key recommendations:

  • Target economic development incentives to align with Michigan’s vision of creating inclusive and equitable economic growth. Michigan should review its existing economic development incentives and, where appropriate, design them to encourage companies receiving state support to remain in Michigan. Given that talent development is a priority for both Michigan and the EV industry, Michigan can consider incorporating requirements in its incentive programs that companies commit to investing in the state’s education and workforce development. Additionally, Michigan can consider attaching other conditions to ensure that public funding produces the best results, such as incorporating prevailing-wage requirements, the use of registered apprenticeships, and community benefits agreements.
  • Improve Michigan’s project-ready sites program. Availability of large sites that are ready for construction—meaning that roads, water, sewer, and electrical infrastructure are all in place—is crucial for Michigan to grow its EV industry. In 2022, Michigan created a Strategic Site Readiness Program (SSRP) to create investment-ready sites. Michigan should use SSRP funding to create an up-to-date inventory of Michigan’s sites, categorized by size and listing of available infrastructure, and ensure that SSRP funding prioritizes sites in disinvested areas and addresses environmental justice concerns.
  • Provide support to automotive parts manufacturers to navigate the EV transition. Large tier 1 suppliers like Bosch and Magna are already manufacturing EV parts and components (Johnson 2022; Field 2022). However, small-to-medium-sized automotive parts manufacturers often do not have large R&D budgets or engineering departments and lack the connection to access external resources. While original equipment manufacturers will play a role in cultivating the capabilities of smaller firms in their supply chains, Michigan can augment private-sector efforts to help smaller manufacturers access cutting-edge research, engineering expertise, equipment, and capital to develop products for EVs. Box 5 highlights one such promising strategy.
  • Investigate and expand new markets in the automotive value chain. As EVs take off, there will be a growing need to recycle their batteries; invest in semiconductor manufacturing and a clean energy–powered grid; and improve cybersecurity to protect vehicles, charging stations, and the grid. Growing these segments in the automotive value chain could be a significant job creator and enable Michigan to attract more EV-related investments. In particular, battery recycling presents a significant opportunity for Michigan to create well-paying jobs and strengthen the battery supply chain. It has been estimated that battery recycling could support 22–27 percent of the lithium, 40–46 percent of the nickel, and 45–52 percent of the cobalt needed for EVs in the United States by 2050 (Hoffs 2022). Michigan should consider financial incentives and other policies, such as a producer take-back policy, to establish the foundation for strong battery recycling research and development and attract the businesses needed to develop a closed-loop battery electric ecosystem. This would also generate significant environmental benefits, including reducing the environmental impacts of batteries and the reliance on raw minerals extraction.

Box 5 | Innovation vouchers to promote supply chain innovation in the EV industry

Innovation vouchers are grants provided to small manufacturers to purchase services from research institutions, national laboratories, and universities to promote innovation. They can be used for R&D assistance, technological feasibility assessments, overcoming specific product development hurdles, product prototyping, and field testing. Recent research shows that innovation voucher programs help establish collaboration on innovation and improve small businesses’ products and services. A growing number of states, including Indiana and Illinois, have created innovation voucher programs in recent years. Indiana provides up to $50,000 for small businesses to access services from in-state higher education institutions and nonprofit research providers. Illinois offers matching funds in the form of innovation vouchers of up to 75 percent of the cost of research, not to exceed $75,000. As with any policy, the effectiveness of innovation voucher programs will depend on how well they are designed, and states should continue to monitor implementation and success.

Sources: Elevate Ventures 2021; LegiScan n.d.; Kleine et al. 2022; Roelandt and van der Wiel 2020; Tian et al. 2021.

Invest in infrastructure improvements including grid upgrades and low-carbon mobility options

In addition to widespread charging infrastructure deployment, large-scale transportation electrification will require more zero-carbon and distributed energy resources on the grid. As EVs increase the demand on the grid, a substantial investment in modernizing the grid will be needed. Furthermore, stepped-up investment in low-carbon mobility options, especially in affordable and zero-emission public transit or walking and biking solutions, can expand access to jobs, healthcare, education, and retail for everyone and make Michigan a desirable and equitable place for workers.

Key recommendations:

  • Increase renewable energy penetration to enable Michigan to meet its planned clean energy target. The MI Healthy Climate Plan has a goal of generating 60 percent of the state’s electricity from renewables and phasing out coal by 2030 (EGLE 2022). In 2021, renewables accounted for 11 percent and coal accounted for 32 percent of Michigan’s net electricity generation (EIA 2022b). Low renewable penetration impacts Michigan’s attractiveness to companies against a backdrop of growing interest by businesses to have 100 percent of their energy needs met by renewables.27 To advance from renewables providing 11 percent of net electricity generation to 60 percent by 2030, Michigan will need ambitious policies such as implementing a clean electricity standard; revisiting existing renewable portfolio standards to increase targets; and reducing siting, permitting, and interconnection barriers to wind and solar project deployment.
  • Invest in grid upgrades to meet the increased demand for electricity from vehicle electrification. Based on anticipated growth in EVs, Michigan utilities and regulators should assess system capacity and develop a plan to ensure that the grid can meet electricity demand for charging EVs. This can include considering options such as colocating energy storage systems with EV charging infrastructure and using distributed energy resource management systems to support vehicle-to-grid functionality.
  • Invest in low-carbon mobility options to make Michigan a desirable place to live and work. Low-carbon mobility options reduce congestion, improve air quality, and expand access to transportation for people who do not have cars. While programs and policies to encourage the adoption of personal EVs are important, complementary programs to sustainably fund public transit and walking and cycling solutions are essential for keeping transportation systems accessible. According to the Michigan Healthy Climate Plan, non-white households represent 79 percent of Michigan transit riders—yet a large majority of in-state jobs are not accessible with existing transit services, creating equity and economic mobility challenges. Vulnerable communities, such as seniors, children, and those with disabilities, require access to critical services like healthcare and education but may not have access to vehicles. For example, 60 percent of low-income students rely on school buses compared with 45 percent of higher-income students (Noblet 2021). In addition, the Michigan Healthy Climate Plan acknowledged that ICE vehicle fleet turnover to EVs will not be fast enough to achieve transportation decarbonization goals, meaning that alternate, affordable transportation strategies will need to be funded. Michigan should expand public transit and multimodal networks, electrify public transit fleets, and improve micromobility solutions such as electric (e-) scooters and e-bikes. Investment in public transit offers a five-to-one economic return, can potentially create 49,700 jobs per $1 billion invested (EDRG 2020), and creates 1.4 times as many jobs as investment in road construction (Jaeger et al. 2021). Policies like Colorado’s Greenhouse Gas Transportation Planning Standard can enable Michigan to assess the emissions impacts of planned large transportation projects and reduce overall transportation emissions over time, effectively prioritizing state funds toward transit and multimodal solutions that complement EV efforts (CDOT n.d.).
  • Consider adopting “buy clean” policies to ensure that infrastructure investments are the cleanest and most sustainable available. Buy clean policies help ensure that taxpayer dollars are spent responsibly on materials that are manufactured in a cleaner, more efficient, and environmentally friendly manner. This reduces pollution and negative health impacts and supports the creation of good jobs. California, Colorado, and Oregon have enacted buy clean laws, and other states such as New York, New Jersey, and Washington are considering it. In a similar fashion, Michigan can leverage its significant purchasing power to drive demand for low-carbon material products.

Equitable EV and charging infrastructure deployment policies

Accelerate the widespread and equitable adoption of EVs through supportive policies

Given that Michigan has been lagging in the national rate of EV adoption (Figure 4), achieving the goal of 50 percent electric LDV sales by 2030 set in the Michigan Healthy Climate Plan or the more ambitious 62 percent sales by 2030 in our All Electric by 2033 scenario will require targeted policy support to encourage EV deployment and help build out the charging infrastructure across the state.

Key recommendations:

  • Consider California’s motor vehicle emissions standards. California has a low-emission vehicle (LEV) standard, which sets increasingly stringent standards for vehicle tailpipe emissions of criteria pollutants and greenhouse gases. California also has a Zero-Emission Vehicle (ZEV) program, which requires automakers to produce an increasing share of zero-emission vehicles. Together, these constitute the state’s Advanced Clean Cars Program. Other states can adopt California’s Advanced Clean Cars standards, including its LEV and ZEV standards. So far, 14 states have adopted both the LEV and ZEV standards while another 3 are following California’s LEV standards. In November 2022, California updated its Advanced Clean Cars regulations to require zero-emission vehicles to reach 100 percent of new vehicle sales by 2035. A few states, including Massachusetts, New York, Oregon, Vermont, and Washington, have either already adopted or started rulemaking to adopt California’s latest ZEV target (NCEL 2023). Michigan can consider adopting California’s more stringent tailpipe emission and ZEV targets to get to 50 percent or more EV sales by 2030 while ensuring that its program is tailored to the state’s specific needs through a stakeholder consultation process that includes the private sector, environmental organizations, and equity groups.
  • Adopt a clean fuel standard. A clean fuel standard (CFS) is a technology-neutral, performance-based strategy to reduce the carbon intensity of transportation fuels and can be designed to help increase EV adoption (Jordan et al. 2021; Kelly 2020). A CFS policy sets the annual carbon intensity for all transportation fuel providers (including electricity) and can be set to increase in stringency over time. Transportation fuels with less carbon intensity than the standard generate credits while those with higher carbon intensities than allowed must obtain credits, creating a tradable system. A CFS can help fund the EV transition—revenue generated from the sale of credits can be used to finance EV adoption and charging infrastructure deployment, with benefits focused on low- and moderate-income communities—and lower the carbon intensity of the remaining stock of non-ZEV vehicles. California, Oregon, and Washington have a CFS policy. Equity concerns—especially concerns that the market-driven nature of a CFS policy can leave low-income communities in pollution hotspots—should be addressed upfront in the design of a CFS policy, and a broad coalition should be included in the design process, including representation from environmental justice groups, consumer organizations, nongovernmental organizations, utilities, EV charging operators, and automakers.
  • Provide financial incentives to purchase or lease new and used EVs and target them to benefit low- and middle-income consumers. Financial incentives, including tax credits and rebates, have been found to be effective in encouraging EV sales, especially for low- and middle-income consumers (Bauer et al. 2021; IEA 2021).28 Financial incentives can be made more effective by offering them as point-of-sale rebates, setting eligibility tiers based on the vehicle manufacturer’s suggested retail price (MSRP), and creating additional incentives for certain income groups (Saha et al. 2021; Clinton and Steinberg 2019). In November 2022, the Michigan Public Service Commission approved DTE Energy’s plan to provide up to 1,300 rebates, with each rebate offering up to $1,500, to income-eligible households for purchase of new and used EVs (MPSC 2022). While this is a good start, Michigan needs to provide these kinds of incentives statewide. Governor Whitmer’s fiscal year 2024 budget proposes $48 million in sales tax incentives of up to $2,400 for the purchase of new, used, or leased EVs. Box 6 provides examples of two state approaches to providing financial incentives. Proceeds from implementing a CFS can be used to create financial incentives as has been done in California (CPUC n.d.). State financial incentives are especially important given that the federal consumer EV tax credits come with assembly, manufacturing, and other types of requirements which could potentially limit their availability in the initial years (Ewing 2022). Non-monetary incentives, such as high-occupancy vehicle lane access and preferred parking access, can also improve EV adoption.
  • Accelerate public fleet electrification. Accelerating the electrification of public transportation, school buses, semi-trucks, delivery vehicles, and municipal fleets would spur demand for EVs—directly benefiting the local economy—and pave the way for corporate fleet electrification while offering health, climate, and economic benefits. The IRA offers significant tax incentives for vehicle fleet electrification, including direct pay provisions for non-taxable entities such as state and local governments. Governments, for instance, are eligible for the commercial EV tax credit covering as much as 30 percent of a vehicle’s sales price; it has no domestic content requirements and offers up to $40,000 per vehicle over 14,000 pounds and $7,500 per vehicle under 14,000 pounds. Michigan’s current light-duty fleet electrification target is set for 2035 with medium- and-heavy-duty vehicle electrification targets set for 2045, but the IRA provisions expire in 2032, so the sooner Michigan acts the more it can take advantage of the savings. Michigan can lead by example by requiring 100 percent of public light-duty vehicle procurements by 2030 and 100 percent of medium- and heavy-duty vehicle procurements to be electric by 2045. Michigan should also require that all school bus procurements be zero-emission when TCO parity is reached, which will be in 2026, according to projections by WRI’s Electric School Bus Initiative. Governor Whitmer’s proposed budget for fiscal year 2024 includes $150 million in matching grants for school districts to buy electric school buses, which is an important step to ensure that school bus electrification becomes a funded mandate and can prioritize underserved communities (MDOE 2023).
  • Address barriers to EV sales by reforming annual EV fees. To make up for declining gas tax revenues, many states impose additional fees on EVs separate from motor vehicle registration fees.29 Michigan’s EV fees have been found to cost EV owners up to two-thirds more than what someone driving a similar-sized ICE vehicle would pay annually in fuel taxes and fees (VanSteel and Griffith 2019). While EV owners should pay their fair share of road and highway maintenance, an alternative approach being considered by some states and advocated by policy experts is a road usage or vehicle miles traveled–based fee, which charges all drivers a fee based on miles driven and can be adapted to reward EV drivers for producing zero tailpipe emissions (Plug In America 2020).
  • Create educational materials to promote EV adoption, especially in low-income communities. Educating consumers through public marketing campaigns about the lower lifetime costs of EVs, the availability of charging, and the federal tax credits available through the IRA can help Michigan increase EV adoption along with the accompanying health and economic benefits for households and the public (Hebbale and Urpelainen 2022). Michigan could consider partnering with an EV-focused organization to create an EV awareness campaign and associated educational materials. When surveyed, communities of color have expressed relatively high interest in EVs but heightened concern about access to charging (Consumer Reports et al. 2022), so the state can emphasize the build-out of public charging infrastructure and accessibility of purchase incentives in messaging to marginalized groups.

Box 6 | Two approaches to providing EV financial incentives

The Connecticut Hydrogen and Electric Automobile Purchase Rebate (CHEAPR) program provides a point-of-sale rebate to those who purchase or lease an EV. The rebate amount is $4,250 for an eligible new EV and those in certain qualified income groups can receive an additional rebate. Colorado offers a tax credit for consumers who purchase or lease an EV. Light-duty EVs purchased before January 1, 2026, are eligible for a $2,000 tax credit while those that are leased are eligible for $1,500. The credits are refundable, meaning the purchaser receives the full value even if they owe less in tax liability. Colorado also allows purchasers to obtain the tax credit value at the time of purchase.

Sources: CDEEP 2022; DEC 2023.

Deploy a robust and equitable network of charging infrastructure throughout the state

Increasing access to charging infrastructure is critical to ensuring EV uptake, with studies finding spending on charging infrastructure twice as effective at promoting EV adoption as spending on EV tax credits (Li et al. 2017; Springel 2021). The $110 million in federal National Electric Vehicle Infrastructure (NEVI) program funding allocated to Michigan and utility EV infrastructure programs (such as charger rebates provided by DTE’s Charging Forward) lay a strong foundation, but our modeling shows that significant additional public and private sector investment in charging infrastructure is needed to meet the MI Healthy Climate Plan goal of building infrastructure to support 2 million EVs on Michigan roads by 2030.

Key recommendations:

  • Encourage and approve utility electrification programs that continue to incentivize electric vehicle supply equipment (EVSE) purchase, installation, and maintenance and operation. Investment in public charging infrastructure has largely come from the Charge Up Michigan program, which leverages Volkswagen settlement money, and from utility programs throughout the state. Michigan’s two largest investor-owned utilities also offer rebates for the installation of charging infrastructure for both residential and commercial customers, and for fleets. These have proved to be very successful, but their funding is limited. Additional funds from the federal NEVI program are expected to further supplement the state’s contribution to EV infrastructure deployment. But even with all of these funding sources, Michigan can consider providing further financial support for public and private investments to meet expected gaps in charging infrastructure. Other states have created charging infrastructure incentive programs using general funds, revenues from carbon reduction programs, or in the case of Hawaii imposing a fee on gasoline cars to fund the installation of EV charging infrastructure (CFME 2021; Ubay 2021).
  • Standardize EVSE permitting. Permitting processes for EVSE projects can oftentimes cause uncertainty and delays and result in higher costs. Recommended practices to facilitate their faster installation include standardizing the permit review and inspection process, having an online permit application process, offering expedited processing, providing dedicated staff to review EV infrastructure applications, amending minimum parking requirements to count EV charging sites as spaces, and requiring utilities to develop and publish distribution system load hosting capacity maps so developers can proactively focus development efforts on favorable grid locations (Saha et al. 2022; Hernandez 2022). In addition, Michigan can pass legislation to streamline, standardize, and expedite the permitting process at the local level. California, for instance, passed AB970 in 2021, which imposes strict timelines for local governments to review permit applications for charging stations.30
  • Adopt EV-ready building and electrical codes for all new buildings. Michigan can consider updating the state’s building and electrical codes to require that new buildings be built with greater electrical service capacity for a specified percentage of parking spaces.31 For example, Oregon requires certain types of new construction to have EV charging capacity in at least 20 percent of parking spaces while New Jersey adopted a model statewide municipal EV ordinance that requires the installation of EVSE and make-ready parking spaces in local communities.32
  • Prioritize the deployment of EV charging infrastructure in disadvantaged and rural communities. Increasing access to charging infrastructure in disadvantaged and rural communities is essential to ensuring that all communities experience the benefits of EVs equitably. Targeting investments toward such communities, in addition to educational outreach, can help increase the uptake of EVs statewide while addressing disparities in access. Socioeconomic factors included in environmental justice screening tools can help identify communities where such investments can be prioritized to ensure that they experience the associated health, economic, and social benefits. Box 7 highlights one such example. In addition, the Sustainable Transportation Equity Project, administered by the California Air Resources Board, has been identified as a promising example by various practitioners (Yozwiak et al. 2022). The project aims to advance transportation equity among low-income and disadvantaged communities and provides two types of grants—planning and capacity-building grants, and implementation grants—enabling communities to do their own needs assessments and propose local solutions.33

Box 7 | Promoting equitable access to EV charging stations in California

The state of California and Valley Clean Air Now, a nonprofit organization in the San Joaquin Valley, launched a nine-month demonstration project called the Zero-
Emissions Vehicle Equity Charging Card in August 2022. The project provides 100 low-income EV owners in the San Joaquin Valley with a $1,000 reloadable, contactless debit card to use at public charging stations. Each card is loaded with an initial $50 and provided an additional $50 per week, with up to $1,000 in benefits. The program is funded by the California Office of Business and Economic Development and is geared toward removing barriers to EV ownership among low-income individuals.

Source: CARB n.d.

Develop public utility policies that support faster deployment of EVs and improved reliability of electricity services

As the pace of EV adoption intensifies, states and their regulatory agencies will have to develop utility policies for EVs that support significant penetration levels in the coming years. State public utility commissions retain jurisdiction over electricity rates, and one strategy, which Michigan has already adopted, is to design EV charging-only rates that incentivize EVs to be charged during off-peak hours.34 Utilities will also play a key role in charging infrastructure build-out and there is more that Michigan can do in this regard.

Key recommendations:

  • Adopt policies to enable faster EV charger interconnection by utilities. Efficient interconnection processes—in which EV charging equipment is connected to the grid—are needed to accommodate the required growth in charging stations. Interconnection bottlenecks can delay projects for months (Hernandez 2022; Trabish 2019). Ensuring a streamlined process for connecting EV chargers to the grid can also facilitate vehicle-to-grid integration, allowing energy to flow to and from plugged-in EVs. Michigan can require its utilities to offer EV make-ready programs that reduce the charging infrastructure costs for developers or customers.35 California’s AB 841, for instance, requires utilities to design, construct, and maintain electrical infrastructure on the utility side of the meter at no cost to the customer (Muller and Baumhefner 2021). The Michigan Public Service Commission can also require utilities to publish average interconnection timelines for different stages in the process as well as hosting capacity maps with all relevant load data to help developers identify favorable locations for their projects and plan ahead (Hernandez 2022).
  • Adopt policies to ensure the reliability and affordability of at-home charging. Michigan currently ranks 46th in the nation on measures of utility reliability and performance, due primarily to the duration of its outages (CUB 2021). Given that 60 to 80 percent of EV charging is expected to occur at home, Michigan must improve reliability to avoid service disruptions. Michigan utilities have proposed investments in the distribution system in part to improve reliability (CUB 2020). Michigan can follow Illinois’s example where in 2011 the legislature stipulated that utilities must meet performance goals for decreasing the frequency and duration of outages or be ineligible to recoup full return on equity for such investments (CUB 2020). Illinois currently ranks fifth in utility reliability and performance. Additionally, Michigan can set penalties that increase in alignment with the duration of outages, make reimbursement to customers for outages automatic, and implement performance-based targets so that underperforming utilities can’t pass the cost of penalties on to ratepayers. While early evidence shows that EV uptake reduces rather than increases residential electricity rates (Fitch et al. 2022), this outcome is dependent on the regulatory environment and should be carefully monitored given the performance of Michigan utilities and the fact that in 2020 the state’s residential rates were the 12th highest in the nation (Gantert 2022).

Quality job creation and just transition policies

Create robust transition opportunities for longtime autoworkers

Irrespective of whether Michigan’s EV trajectory follows a high or low competitiveness pathway, as discussed in the previous section, the transition will be uneven, including for workers within the auto manufacturing segment. It is critical to ensure that all workers currently employed in ICE vehicle manufacturing can transition to other roles, whether within EV manufacturing or in other sectors and while assisting workers at or near retirement age. Some workers may have skills that allow them to find new jobs quickly, while others may require more extensive training or reskilling or desire to switch fields or careers.

Key recommendations:

  • Create a transition support fund for workers impacted by the EV transition. A dedicated fund can help workers affected by the EV transition with retraining and education programs, counseling, relocation fees, and short-term wage replacement if workers lose their incomes before finding a new job or before they are eligible for full retirement benefits (Cha et al. 2021a; Saha and Jaeger 2020; Wang et al. 2022). Funding sources can include general appropriations, redirecting existing funding streams, and/or private sector contributions. Appendix F provides examples of states offering transition support to workers. While those are mostly in the context of coal workers and communities, they can be expanded to include all workers impacted by the energy transition, including auto workers.
  • Establish a “rapid response team” to address job displacement and mass layoff situations. This team could be housed within a newly created office of just transition, which would be entrusted with the responsibility of coordinating Michigan’s just transition policies for all fossil fuel sectors, or within an existing office (for example, the Office of Future Mobility and Electrification).36 Such a team could work with employers to provide incentives to keep legacy workers employed, respond to layoffs by quickly coordinating resources and providing support to affected workers, and help employees shift to new roles through employer-provided training.37 In addition, such a team could help troubled employers or businesses look for incentives and other programs they may qualify for to help them shift their work to new or expanding industries, helping them remain open as a successful business. Michigan can also consider requiring that companies provide advance notice (beyond what is required by federal law) of facility closure or mass layoffs. This can enable the state and impacted local governments to work together with the company to proactively provide support for displaced workers.
  • Work with employers to create plans to provide fair early retirement packages for ICE vehicle workers. One-quarter of Michigan’s motor vehicle and motor vehicle parts manufacturing workers were over 55 years of age in 2019 (Census Bureau n.d.). Older workers may find it difficult to train for a new position or switch to a different industry. State offices should work with employers to determine what would be included in a fair compensation package for workers entering early retirement who are not yet eligible for their pensions or full federal retirement benefits. Doing so can help ensure that workers do not slip through the cracks while helping the state understand the size of the workforce that will need to be replaced in the EV transition and assisted as they retire.

Ensure that jobs in the EV industry offer family-sustaining wages, security, and potential for growth

Making sure jobs created through the EV value chain are high quality and safe and provide opportunities for development is critical to ensuring that Michigan’s auto industry remains a desirable space for workers (Jaeger et al. 2021). As Michigan provides millions of dollars in grants, loans, tax breaks, and various economic development incentives, it can also adopt policies to ensure that government spending is creating good jobs.

Key recommendations:

  • Strengthen prevailing wage requirements and provide guidance on determining comparable jobs and wages in the EV industry. Prevailing wages—requiring employers to pay the basic hourly rate of wages and benefits paid to similarly employed workers—are generally limited to workers in the construction industry (BGA 2020; Glass et al. 2022). In March 2023, Michigan restored prevailing wages for state-subsidized construction projects that had been repealed in 2018, which makes EV charging station installation and construction projects eligible for prevailing wages.38 Michigan can go further and consider extending prevailing wage requirements to manufacturing projects funded with state money, including in battery manufacturing where there are concerns about low wages and poor working conditions, thereby upholding high job standards in the auto industry as it electrifies (Glass et al. 2022; White House 2021).39 To do this, Michigan will need to develop guidance for determining “comparable workers,” which can be done by using jobs in ICE vehicle manufacturing as reference points for EV jobs.40 Additionally, Michigan will need to invest in appropriate data collection to ensure that prevailing wage calculations reflect market conditions, provide periodic updates of wage determinations, and ensure effective implementation (Glass et al. 2022).
  • Ensure workers have the right to unionize, which has been found to be a strong determinant of job quality. Unions have been a key factor in creating good jobs in the state’s current ICE vehicle industry, highlighting the need to safeguard the right of workers to unionize and ensure that jobs created in the EV industry offer high wages, health benefits, job protection, and workplace safety, and follow prevailing wage requirements (Madland 2022; Lafer 2021).41 California, New Jersey, New York, and Oregon have long-established policies for enabling workers to form unions without fear of retaliation from their employers, which is reflected in high union membership in those states compared with Michigan (Lafer 2021; BLS 2022b). Ensuring that workers have the right to unionize, especially in relatively new industries such as battery manufacturing, is key for establishing good jobs and setting precedent for other companies and facilities.42 In March 2023, Michigan repealed its right-to-work law, which had allowed workers in unionized jobs to opt out of membership and paying dues, thus making a significant step toward restoring workers’ collective bargaining power. Establishing wage boards by industry or occupation, which bring together representatives from workers, business, and the government to set minimum pay standards, can also be a useful strategy to ensure workers in low-union-density industries are protected (Wall and Madland 2021; Dube 2020).43
  • Create clear, time-bound pathways for temporary workers to transition to comparable permanent, full-time roles and disincentivize the use of temporary worker contracts. Temporary workers often do the same job but earn less and lack protection, workplace safety and training, access to healthcare and benefits, and the stability of full-time workers (Upjohn Institute n.d.). It is estimated that temporary workers make up about 20 percent of the employees in the auto industry and are sometimes in their assignments for over a year (NELP 2022). Helping such workers transition (see Box 8) and designing policies to limit the use of such contracts is critical to ensuring automotive jobs are good jobs. One option is to make public subsidies and support contingent on the status of workers within companies (for instance, designating that public subsidies are available to companies with no more than a certain percentage of temporary workers), while training and workforce development programs should be dependent on the creation of full-time jobs. For competitive grants, agencies should include criteria that consider labor policies, like the IIJA’s battery grant applications, which encourage applicants to demonstrate their credentials as a responsible employer, particularly when it comes to ensuring that workers have access to and the opportunity to join a union (DOE 2022b).

Box 8 | Transitioning temporary workers to permanent, full-time status

Collective bargaining led by the United Auto Workers at several of Ford’s plants in Michigan, Ohio, and Missouri has helped thousands of temporary workers transition to full-time status and receive better wages, job security, healthcare, and access to profit-sharing. It has also helped some workers qualify for supplemental unemployment benefits. These allow permanent workers with one year of service to have steady incomes even during layoffs when factory downtime is required, a necessary part of the industry due to disruptions caused by supply shortages, such as of semiconductor chips.

Source: UAW 2019; Ford 2022.

Protect communities impacted or at risk of being impacted by the closure of legacy auto facilities

While the transition to EVs will involve significant retooling of legacy auto facilities, it may also force some facilities to close, even if temporarily.44 This can create significant disruption to communities and local governments due to losses in jobs and local revenues. Local communities and governments will need support to alleviate those losses immediately following a facility’s closure as well as robust reinvestment to promote long-term economic resilience.

Key recommendations:

  • Provide transition support for communities impacted by the closure of auto facilities related to ICE vehicle production. Michigan should provide funding to assist communities, businesses, and local governments in developing plans to address the economic dislocation associated with the closing of a facility that is a major employer and revenue generator. This can include funding for worker retraining, local capacity building, establishing alternative economic development strategies to attract new employers, and/or providing temporary local revenue replacement for the lost tax base. Transition support to communities should include transportation assistance, through subsidies or credits, which has been identified as an important factor in helping community members look for other economic opportunities. Appendix F provides examples of a few states that are doing this. Over the long term, investing in infrastructure upgrades, including in broadband access, public transit, and schools, can provide a strong economic foundation for local communities’ recovery from facility closures.
  • Support community-based efforts to reimagine how former automotive manufacturing sites should be repurposed. It is important to prevent sites from becoming unusable or unhealthy brownfield sites, should the company shutdown or relocate elsewhere, including requiring comprehensive environmental remediation upon facility shutdown. While some brownfields may be suitable for site development for EV charging facilities (EPA 2021), local communities should have a leading voice in determining what the site will be repurposed for and how investments can be most beneficial.

Ensure communities benefit from new EV investments by adopting supportive policies such as community benefits agreements

A community benefits agreement (CBA) is typically a private legal agreement between a company and community groups, labor unions, or other entities whereby the company agrees to specific commitments to benefit the community (Patterson et al. 2017; Been 2010). Local governments have often participated in the negotiations and sometimes incorporated the CBA into their development agreement with the company. Recently, however, a handful of states and localities have adopted policies to institutionalize CBAs, including New Jersey45 and the city of Detroit.46 Well-designed CBAs can be a powerful tool to ensure that new investments in EV assembly, battery manufacturing, and other facilities benefit the communities they are sited in.

Key recommendation:

  • Consider adopting a statewide CBA framework as an integral component of the economic development toolkit. While there are legitimate concerns about whether CBAs will lower Michigan’s competitiveness vis-à-vis other jurisdictions that do not have CBAs, there are several reasons for Michigan to do this. The institutionalization of CBAs at the state or local level can increase predictability in the development process for the private sector, community groups, and local governments. Properly designed, enforceable CBAs can also reduce frictions that delay the process, such as community opposition to EV and other clean energy projects, potentially speeding up the transition while ensuring accountability. As CBAs become increasingly popular, it may benefit Michigan to have a state-sanctioned CBA framework rather than leave it to community groups with fewer resources and less capacity to negotiate with large companies. Part of the process should require that tools and resources be provided to community members so that they can be empowered to meaningfully engage in the process. Appendix E provides an overview of Detroit’s Community Benefits Ordinance and identifies key recommendations to make CBAs more effective.

Utilize robust environmental justice screening tools to mitigate the cumulative pollution burden that auto-related investments impose on Michigan communities

Environmental injustices have imposed disproportionate pollution burdens on communities of color and low-income communities for decades. As Michigan seeks to attract EV-related investments, it has to be mindful of the fact that emissions from EV production and battery manufacturing powered by fossil fuels can impact surrounding communities (White-Newsome et al. 2021). While the Biden administration has made achieving environmental justice a top priority, scholars have long argued that actions taken at the state level are the most efficient and effective ways to correct distributive inequities (Zrzavy et al. 2022). A growing number of states, including Michigan, have developed environmental justice screening tools, which typically combine data on socioeconomic factors and environmental hazards and pollutants to identify areas with the greatest health burden from cumulative pollution, though a key gap in the development of these tools is that they do not consider pollution burdens from areas outside of their respective states (Konisky et al. 2021; Ravichandran et al. 2021). Such screening tools can also be used to identify communities that face other barriers, such as a lack of available transportation, which can help policymakers target investments.

Key recommendations:

  • Clarify how state agencies will use MiEJScreen in their decision-making. While MiEJScreen, Michigan’s screening tool, is still in development, Michigan should clarify how state agencies will use MiEJScreen in their decision-making going forward. For example, California requires the state’s EPA to allocate a certain share of funds generated through the state’s carbon trading program to benefit disadvantaged communities, and the agency uses CalEnviroScreen to comply with that requirement.47
  • Require a review of the existing pollution burden before approving permits. In most cases, the use of screening tools to inform permitting decisions tends to be informal and ad hoc (Konisky et al. 2021). New Jersey’s 2020 Environmental Justice Law, however, requires the state’s Department of Environmental Protection to review the existing pollution burden on communities before issuing a new permit and to refuse to issue a permit if a new facility will have a disproportionately negative impact on overburdened communities.48 Following New Jersey’s example, Michigan can consider using its screening tool to identify overburdened communities—including those that are impacted by interstate pollution, especially in state border areas and main airsheds—and deny permits to new and expanding facilities if those are found to add to the cumulative burden on these communities.
Start reading