A roadmap for Michigan’s electric vehicle future

An assessment of the employment effects and just transition needs

Conclusion

The transition to EVs presents significant economic opportunities for Michigan. However, realizing the full benefits of the transition will depend on the extent to which Michigan adopts policies to both manufacture EVs, batteries, and other components as well as deploy EVs and associated infrastructure—while doing all this in a manner that brings the benefit of the transition to workers, communities, and all its residents.

Joni Hanebutt

The development of the EV industry in Michigan should not be viewed as a zero-sum game. In fact, the policy recommendations offered in this report can inform policymakers in other states as well as they look to speed up EV adoption and manufacturing of EVs, chargers, and batteries. The shift to EVs has begun to pick up but we should not underestimate the scale of what is required. It will take a significant effort to build up a supply chain and an ecosystem that can support the goal of 100 percent EV sales by the mid-2030s. In addition to Michigan, other states should be investing in the EV revolution and reaping its benefits.

Our analysis revealed that in a scenario where EVs reach 62 percent of LDV sales by 2030 and 100 percent by 2033, and Michigan raises its share of domestic auto production from the current 20 percent to 25 percent, and its share of domestic battery manufacturing from 10 percent to 15 percent, Michigan stands to add 56,000 direct, indirect, and induced jobs in auto manufacturing in 2030 compared with a No Transition scenario. There will also be employment opportunities in other areas such as EV charging infrastructure, renewable energy, and net savings from EV ownership.

Achieving this outcome will primarily depend on policy choices. It will all come down to whether Michigan is able to strengthen its innovation ecosystem, develop a workforce pipeline, bolster its manufacturing competitiveness, and improve its infrastructure. These are the fundamental building blocks to attracting new investments in EV assembly, battery manufacturing, and related industries as well as talent. In particular, exploring new markets, including battery recycling, and investing in a clean grid and low-carbon mobility options will make Michigan a more attractive place for job creation and talent.

By the same token, many of the economic benefits of the EV transition will depend on whether Michigan invests in the EV charging infrastructure that will be needed and pursues other policies and incentives that will support the growth in EV adoption. This will ensure that Michigan EV drivers realize fuel savings, that new jobs are created for installing charging stations and upgrading the grid, and that Michigan maximizes the potential capture of federal tax incentives and other funding from the IIJA and IRA. These policies will also help attract talent and new companies to the state, as part of a culture of innovation.

Beyond attracting new investments and facilitating EV adoption, Michigan will also need to make sure that it is facilitating a just and equitable EV transition for its workers, communities, and EV consumers. The EV transition is bound to have an uneven impact on workers, even in a scenario where Michigan has a net job advantage from the transition. Given the technical and operational differences in EVs and ICE vehicles, some workers in ICE vehicles and parts manufacturing can be trained to work in the EV industry but it is also possible that some jobs will be eliminated. Furthermore, it will be important to ensure that new jobs in the EV industry are good jobs with decent wages, benefits, and options to unionize. Finally, the deployment of EVs and charging infrastructure will need to take place in an equitable manner such that low-income communities, communities of color, and those most burdened by the impacts of local air pollution benefit from the transition.

Michigan has already made important strides toward an electrified transportation future. The modeling results and policy recommendations presented in this report lay out a roadmap for Michigan to build on its progress thus far and stake out a leadership position in enabling a just and equitable transition to EVs. Michigan leaning in on EV policy could also help drive EV adoption in the Midwest and arguably other parts of the United States, as more states seek to follow Michigan’s example and learn from its efforts.

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