A roadmap for Michigan’s electric vehicle future

An assessment of the employment effects and just transition needs

Executive summary

Michigan’s economy stands to benefit significantly from the EV transition if it proactively strengthens its position in EV production and deployment. This report aims to equip Michigan policymakers with a strategy to grow the state’s EV industry while ensuring that the transition creates quality jobs and does not leave longtime autoworkers and auto manufacturing communities behind.

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Highlights

  • Michigan can be a leader in the electric vehicle (EV) industry by building on promising state efforts, recent federal laws, and its long-established strengths in automotive research, development, and manufacturing.
  • If Michigan adopts the right new policies and increases its market share in EV and battery production during the transition to an all-electric future, the state could add 56,000 jobs in auto manufacturing in 2030 compared with what would occur if the EV transition did not take place. If, however, Michigan fails to seize the opportunities presented by the transition, auto manufacturing jobs could decline.
  • Continued, active support for the workforce transition is needed because there will be job gains in some segments of the automotive value chain (e.g., battery manufacturing, EV charging infrastructure) and losses in others (e.g., internal combustion engine manufacturing, auto repair and maintenance).
  • Based on extensive stakeholder consultations, this report proposes that Michigan should do the following: continue pursuing innovation-oriented economic development to attract investments and talent in the state’s expanding EV industry; equitably accelerate EV deployment; and create quality EV jobs that offer family-sustaining wages, security, and potential for career growth while ensuring that longtime auto workers and communities are not left behind.

Context

With the right policies, Michigan’s economy and environment both stand to benefit tremendously from the EV transition. Building up the EV industry in Michigan can drive economic development and job creation. Adopting more EVs can also allow Michigan drivers to save money on vehicle purchases, maintenance, and gasoline use. At the same time, embracing and properly preparing for the transition to EVs can dramatically reduce the state’s greenhouse gas emissions and dependence on fossil fuels, improve public health by lowering air pollution, and support environmental justice outcomes.

The transition to EVs is accelerating in the United States and globally. The future of transportation is electric. In 2022, sales of battery EVs and plug-in hybrid EVs accounted for 6 percent of the US market (Shahan 2023) and 13 percent of the global market (Irle 2023). The transportation sector is the largest source of US greenhouse gas emissions (EPA 2022), making the shift to EVs critically important. The Biden administration has a goal for EVs to comprise 50 percent of new car sales in the country by 2030. This goal is now within reach given the recent passing of the federal Infrastructure Investment and Jobs Act (2021), the CHIPS and Science Act (2022), and the Inflation Reduction Act (2022), which are poised to spur domestic manufacturing and deployment of EVs. In addition, the Environmental Protection Agency has proposed new tailpipe pollution regulations that it expects would cause EV sales to exceed the goal of 50 percent in 2030 and reach two-thirds of light-duty vehicle sales by 2032. Still, even more acceleration is needed at the federal and state levels to reach a 62 percent EV share of light-duty vehicle sales in 2030 and 100 percent share by 2033, which would make the United States consistent with a global target of economy-wide net-zero emissions by 2050 (BNEF 2022a; Slowik et al. 2023).

Building on its historic strengths in the automotive industry, Michigan has begun to position itself as a leader in the production and deployment of EVs. In 2020, the state created an Office of Future Mobility and Electrification to coordinate mobility and electrification activities across the public and private sectors, and last year the government established a goal to deploy enough charging infrastructure to support 2 million EVs on the road by 2030. With the governor’s office and the newly elected state legislature signaling their support, Michigan has an opportunity to adopt more ambitious and equitable transportation electrification policies. Automakers, suppliers, and infrastructure providers are pouring billions of dollars in investment into Michigan’s economy. However, Michigan is also competing with other states for these investments, and its ability to lead the EV industry is not guaranteed. Implementing the correct policy framework will allow Michigan to maintain its leading role in auto manufacturing.

It is important for Michigan to put in place policies that ensure that longtime autoworkers and communities are not left behind during the transition. The EV transition will bring about changes to auto sector employment patterns, making it critical to ensure that workers and communities benefit from the shift. New industries and job opportunities will be created in EV battery manufacturing, deployment of EV charging infrastructure, and expansion and modernization of the electric grid to power the EVs. These economic opportunities will be amplified because the Inflation Reduction Act has provisions to incentivize domestic EV production. On the other hand, EVs have fewer moving parts than internal combustion engine (ICE) vehicles so less labor will be needed in ICE and ICE vehicle component manufacturing as well as in auto maintenance and repair. In addition, fewer gas stations will be needed. All this will significantly impact the existing automotive workforce and communities where this workforce is concentrated while raising questions around how to create high-quality and inclusive jobs in the growing EV industry.

About this report

This report aims to equip Michigan policymakers with a strategy to grow the state’s EV industry while ensuring that the transition creates quality jobs and does not leave behind longtime autoworkers and communities. Our analysis relied on a combination of economic modeling and stakeholder consultations to better understand how the shift to EVs will impact employment. We used the DEEPER (Dynamic Energy Efficiency Policy Evaluation Routine) Modeling System, a macroeconomic input-output model, to estimate the employment effects in Michigan of the transition to light-duty EVs from 2024 to 2040. The economic modeling was complemented with extensive stakeholder engagement to inform both the modeling analysis and the development of a suite of recommendations for Michigan policymakers. We consulted with stakeholders across the state government, academia, the private sector, labor organizations, nonprofit organizations, and community groups, and also benefited from the expert guidance of a nine-member civil society advisory council.

Findings

This report presents indicative results for an All Electric by 2033 scenario with a High Competitiveness case and a Low Competitiveness case. In the All Electric by 2033 scenario, EVs reach around 62 percent of light-duty vehicle sales by 2030 and 100 percent by 2033. In the High Competitiveness case, Michigan increases its share of domestic auto production and battery manufacturing, while in the Low Competitiveness case those shares decline (Table ES-1). To provide Michigan policymakers with information regarding the magnitude of change that will transpire between now and 2040, all jobs effects are presented in comparison to a No Transition scenario in which EVs do not grow further. Our results include direct jobs in a sector, indirect jobs in the supply chain for that sector, and induced jobs created when direct and indirect workers spend their earnings on goods and services in the wider economy.

Table ES-1 | Scenarios and cases

 

No Transition scenario

All Electric by 2033 scenario, High Competitiveness case

All Electric by 2033 scenario, Low Competitiveness case

EV sales

No growth in EVs

EVs reach 62% of light-duty vehicle sales in 2030, 100% by 2033

Michigan’s share of US vehicle production

Remains at 20%

Rises to 25% by 2030 and stays at that level

Falls to 15% by 2030 and stays at that level

Michigan’s share of US EV battery production

Remains at 10%

Rises to 15% by 2030 and stays at that level

Falls to 5% by 2030 and stays at that level

Note: See "Approach: Understanding EV Just Transition Needs" and Appendix C for full explanation and sources. EV = electric vehicle.

Source: Authors.

The transition to EVs will lead to net job gains in auto manufacturing if Michigan puts in place policies that enable it to secure a sufficient share of the nation’s automotive and battery manufacturing value. In the High Competitiveness case, Michigan would add 17,000 direct jobs in auto manufacturing and around 12,000 indirect jobs in the supply chain in 2030 compared with the No Transition scenario. Battery manufacturing would grow quickly and be responsible for the majority of those additional jobs. In addition, the ripple effect of those workers spending their earnings would create 27,000 induced jobs in the wider economy. The total effect would be 56,000 additional direct, indirect, and induced jobs in 2030, and 41,000 in 2040 (Figure ES-1).1 On the other hand, in the Low Competitiveness case in which Michigan loses market share, there would be a net negative effect on 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. There would be some increases in battery manufacturing jobs, but they would not be enough to make up for the job losses in the other aspects of auto manufacturing. The direct and indirect job decreases 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 the effects would stay relatively the same from 2030 to 2040. Achieving the High Competitiveness case rather than the Low Competitiveness case will require Michigan government and companies to successfully take advantage of new opportunities in the emerging EV industry, which will require the consideration of additional policies beyond what Michigan is currently implementing.

Figure ES-1 | Change in auto manufacturing jobs (including battery manufacturing jobs) in All Electric by 2033 scenario

Source: Authors.

Retraining efforts aligned with growing demand for EV production will be critical for ensuring that ICE vehicle manufacturing workers are able to transition to EV manufacturing roles, including in battery manufacturing. With the changes in the production process and the losses in manufacturing, especially in the Low Competitiveness case, some employees will need to be retrained while others may need to transition into work outside the automotive industry. Much of the skills and sectoral transition could be addressed as part of normal rates of retirement, given that 52 percent of all current auto manufacturing workers in Michigan will reach age 65 by 2040 (Census Bureau n.d.).

In addition to production workers to build EVs and manufacture batteries and chargers, Michigan will need to grow its pipeline of high-tech knowledge workers. The software-defined electric vehicle, for instance, will require an influx of electrical and software engineers while the development of new battery technology will need chemical engineers, manufacturing process engineers, and battery lab technicians. These are jobs that will require at least a bachelor’s degree, but they also are high-paying and important drivers of economic growth. Michigan will need to consider policies that make it an attractive destination for high-tech talent.

The way that EVs are fueled, operated, and maintained will also have important jobs effects, irrespective of Michigan’s level of manufacturing competitiveness (Table ES-2). These jobs effects stay the same in both the High and Low Competitiveness cases, given that they are caused by the number of EVs on the road in Michigan, not the number manufactured in Michigan. The installation and operation of EV charging infrastructure in Michigan in line with an All Electric by 2033 scenario would create around 7,500 additional direct, indirect, and induced jobs in 2040. Electricity purchases to fuel EVs would support direct, indirect, and induced jobs from power generation, transmission, and distribution, equivalent to 12,000 jobs in 2040 above the No Transition scenario. On the other hand, a decline in gasoline use would lead to 46,000 fewer direct, indirect, and induced gas station jobs in 2040 compared with the No Transition scenario if they are not repurposed as EV charging stations. The direct jobs at gas stations are mostly convenience store jobs with below-average wages that current economic trends indicate are particularly likely to become automated regardless of vehicle electrification (Begley et al. 2019; BLS 2022a). The transition can, therefore, offer a chance for these workers to re-skill, upskill, or shift to jobs of equal or greater quality—if Michigan implements appropriate workforce transition policies. Auto maintenance and repair needs would gradually decline as the fleet turns over, leading to 26,000 fewer direct, indirect, and induced maintenance and repair jobs in 2040 compared with the No Transition scenario.

Table ES-2 | Jobs created from sectors other than auto manufacturing in All Electric by 2033 scenario

 

Change in jobs in Michigan in 2040 compared with No Transition scenario

 

Direct jobs

Indirect jobs in supply chain

Induced jobs in wider economy

Total

EV charging infrastructure

4,000

700

2,700

7,500

Electricity purchases

1,500

3,100

7,200

11,800

Gasoline purchases

-24,600

-8,500

-13,100

-46,100

Auto maintenance and repair

-13,200

-2,500

-9,900

-25,700

Auto finance

 

-6,400

Renewable energy to support transition to EVs

 

7,600*†

Net savings re-spending

 

26,900

Inflation Reduction Act tax credit savings

 

15,000*‡

Notes: Totals may not be equivalent due to rounding; *Back-of-the-envelope calculation rather than full modeling exercise; † Annual average, 2024–40; ‡ Results from 2032, the last year of the tax credits.

Source: Authors.

Switching to EVs will allow drivers to save money on vehicle purchases, maintenance, and gasoline, which will improve household finances and have positive employment impacts. In the All Electric by 2033 scenario, Michiganders save a cumulative US$39.5 billion on vehicle ownership by 2040. When they re-spend that money in the rest of the economy, it would create around 27,000 jobs in Michigan by 2040. For context, this is enough to fully offset job losses in auto maintenance and repair. The EV and battery tax credits in the Inflation Reduction Act will increase these savings and job creation even further, leading to $8.7 billion in cumulative savings and 15,000 jobs created by 2032, the last year of their effect.

The transition to EVs will also lower health burdens across the state, including in disadvantaged communities. Internal combustion engine vehicles emit sulfur dioxide, nitrogen oxides, volatile organic compounds, and particulate matter. People of color are more likely than average to live in communities with unhealthy air, partially due to traffic patterns. Through a shift to zero-emission transportation, Michigan would avoid approximately 4,700 deaths, 97,400 asthma attacks, and 466,000 lost workdays from 2020 to 2050 (ALA 2022a).

Considering all areas modeled in this report, including auto manufacturing and other sectors related to EVs,2 the net jobs effect in the All Electric by 2033 scenario’s High Competitiveness case is positive. The number of direct, indirect, and induced jobs would be 47,000 higher in 2030 and 10,000 higher in 2040 than the No Transition scenario. On the other hand, in the Low Competitiveness case, there would be 57,000 fewer direct, indirect, and induced jobs in 2030 and 80,000 fewer in 2040 compared with the No Transition scenario.

Michigan’s overall economy has the capacity to adapt to the coming changes, but it will require policies to ensure wins for workers and communities. The employment shifts from EVs will be relatively small compared with other employment trends. Outside analysis has estimated that Michigan’s entire economy will add 585,000 jobs by 2030 and 880,000 jobs by 2040 (W&PE 2022). This is more than 10 times more than the jobs effects from auto manufacturing in either direction from the High or Low Competitiveness cases (Figure ES-2). However, the effect of the changes will be uneven, with job losses in some segments of the automotive value chain and gains in others. Given the concentration of motor vehicle parts and manufacturing in the Detroit region, it will likely be at the heart of these changes. That means Michigan needs to ensure that the transition maximizes economic and social opportunities for workers and communities while minimizing potential risks.

Figure ES-2 | Auto manufacturing jobs effects of the EV transition are small in comparison to Michigan’s projected overall employment growth

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

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

Policy recommendations

Michigan should pursue policies to achieve three goals that are critical for ensuring a thriving ecosystem for its auto industry, workers, communities, and economic outlook. Detailed recommendations for Michigan policymakers, including the state legislature, the governor’s office, and various departments, are identified in Table ES-3, which also includes information on the key agencies responsible for executing the recommendation and the type of action required.

  1. Pursue innovation-oriented economic development to improve the state’s innovation, manufacturing, and infrastructure ecosystem to be able to attract EV investments and talent in everything from manufacturing to research, design, and development of products and services to meet the needs of an all-electric future.
  2. Accelerate equitable EV and charging infrastructure deployment to become not only a top producer but also a leading state in EV adoption.
  3. Create quality jobs offering decent wages, security, and opportunities to grow in the state’s expanding EV industry while ensuring that longtime autoworkers and communities are not left behind.

In addition to these recommendations, Michigan should pursue federal funding available through the Infrastructure Investment and Jobs Act, the CHIPS and Science Act, and the Inflation Reduction Act to decarbonize its transportation sector. Michigan can leverage the most out of these opportunities by maximizing its federal funding (e.g., using the National Electric Vehicle Infrastructure Formula Program to strategically deploy EV charging infrastructure) and aligning key state goalposts with the expiration of federal funding provisions.

Table ES-3 | Policy recommendations to grow Michigan’s EV industry and drive an equitable transition

Policy recommendation

Strategies

Agent(s)

Requires

Goal 1: Pursue innovation-oriented economic development that enables Michigan to attract EV-related investments and talent (pages 56–62)

Develop the workforce pipeline for the EV industry.

Track labor market dynamics across the entire automotive value chain and over time to align job demand and labor supply.

LEO; MEDC

Executive action; local coordination and partners

Support industry-led worker training partnerships.*

LEO; MEDC

Executive action; local coordination and partners

Support existing apprenticeship and pre-apprenticeship programs and create programs where needed.*

LEO

Executive action; local coordination and partners

Track outcomes of all workforce and training programs.

LEO

Executive action; local coordination and partners

Develop curriculum upgrades in postsecondary institutions focusing on occupations that are critical for the transition to EVs.

LEO

Executive action; local coordination and partners

Introduce middle and high school students to careers in the EV industry.

MDE

Executive action

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

Provide greater public investments in higher education to strengthen the state’s skills base.

State legislature; MDE

Legislative action with public funding

Invest in programs to attract and retain STEM students.

State legislature; LEO

Legislative action with public funding

Strengthen business R&D in the state.

State legislature; MEDC

Legislative action with public funding

Facilitate greater interaction and connections among companies, research universities, national laboratories, and the Department of Energy.

MEDC; LEO

Executive action; local coordination and partners

Protect and bolster Michigan’s EV manufacturing competitiveness.

Target economic development incentives to align with Michigan’s vision of creating inclusive and equitable economic growth.*

MEDC

Executive action

Improve Michigan’s Project-Ready Sites Program.

MEDC; MPSC

Executive action

Provide support to automotive parts manufacturers to navigate the EV transition.

MEDC

Executive action

Investigate and expand new markets in the automotive value chain including in EV battery recycling.

EGLE; MEDC

Executive action; legislative action with public funding

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

Increase renewable energy penetration to enable Michigan to meet its planned clean energy target.*

State legislature; EGLE; MPSC

Legislative action; regulatory action

Invest in grid upgrades to meet the increased demand for electricity from vehicle electrification.*

State legislature; MPSC

Legislative action with public funding; regulatory action

Invest in low-carbon mobility options to make Michigan a desirable place to live and work.*

State legislature; MDOT

Legislative action with public funding

Consider adopting “buy clean” policies to ensure that infrastructure investments are the cleanest and most sustainable available.

State legislature; EGLE

Legislative action with public funding; regulatory action

Goal 2: Accelerate equitable EV and charging infrastructure deployment (pages 62–67)

Accelerate the widespread and equitable adoption of EVs through supportive policies.

Consider California’s motor vehicle emissions standards.

State legislature; EGLE

Legislative action with no public funding

Adopt a clean fuels standard.*

State legislature; EGLE

Legislative action with no public funding

Provide financial incentives to purchase new and used EVs and target those that benefit low- and middle-income consumers.*

State legislature; EGLE; Department of the Treasury

Legislative action with public funding

Accelerate public fleet electrification.*

DTMB; MPSC

Legislative action with public funding

Address barriers to EV sales by reforming annual EV fees.

EGLE; MDOT

Legislative action set by statute with administration’s help with design

Create educational materials to promote EV adoption, especially in low-income communities.

EGLE

Executive action

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

Encourage and approve utility electrification programs that continue to incentivize electric vehicle supply equipment (EVSE) purchase, installation, and maintenance and operation.*

MPSC

Regulatory action

Standardize EVSE permitting.

State legislature; LARA

Legislative action with no public funding

Adopt EV-ready building and electrical codes for all new buildings.

State legislature; LARA

Legislative action with no public funding; regulatory action

Prioritize the deployment of EV charging infrastructure in disadvantaged and rural communities.

MPSC; ORD; planning organizations

Executive action; legislative action with public funding

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

Adopt policies to enable faster EV charger interconnection by utilities.

State legislature; MPSC

Legislative action with no public funding

Adopt policies to ensure reliability and affordability of at-home charging.*

State legislature; MPSC

Legislative action with no public funding; regulatory action

Goal 3: Create quality jobs while ensuring that the EV transition does not leave longtime autoworkers and communities behind (pages 67–71)

Create robust transition opportunities for longtime auto workers.

Create a transition support fund for workers impacted by the EV transition.

State legislature; LEO; Department of the Treasury

Legislative action with public funding; local coordination and partners

Establish a “rapid response team” to address job displacement and mass layoff situations.

LEO; planning organizations**

Executive action

Work with employers to create plans to provide fair early retirement packages for ICE vehicle workers.

LEO

Local coordination and partners

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

Strengthen prevailing wage requirements and provide guidance on determining comparable jobs and wages in the EV industry.

State legislature; LEO

Legislative action with no public funding

Ensure workers have the right to unionize, which has been found to be a strong determinant of job quality.

State legislature; LEO

Legislative action with no public funding

Create clear, time-bound pathways for temporary workers to transition to comparable permanent, full-time roles and disincentivize the use of temporary worker contracts.

LEO

Executive action

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

Provide transition support for communities impacted by the closure of auto facilities related to ICE vehicle production.*

State legislature; LEO; planning organizations

Legislative action with public funding; local coordination and partners

Support community-based efforts to reimagine how former automotive manufacturing sites should be repurposed.

LEO; ORD; planning organizations

Executive action; local coordination and partners

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

Consider adopting a statewide CBA framework as an integral component of the economic development toolkit.

State legislature; LEO; MEDC

Legislative action with no public funding; local coordination and partners

Utilize robust environmental justice screening tools to ensure that EV-related investments do not add to the cumulative pollution burden of Michigan communities.

Clarify how state agencies will use MiEJScreen in their decision-making.*

EGLE

Executive action

Require a review of the existing pollution burden before approving permits.

EGLE

Regulatory action

Notes: Strategies marked with an asterisk (*) have been included in the Michigan Healthy Climate Plan and/or recommended by the Michigan Council on Future Mobility and Electrification; ** Planning organizations refer to a broad group of entities including local and regional economic development organizations and community-based organizations connecting people to employment opportunities.

Abbreviations: R&D = research and development; STEM = science, technology, engineering, and mathematics; DTMB = Department of Technology, Management & Budget; EGLE = Michigan Department of Environment, Great Lakes, and Energy; LARA = Michigan Department of Licensing and Regulatory Affairs; LEO = Michigan Department of Labor and Economic Opportunity; MEDC = Michigan Economic Development Corporation; MDE = Michigan Department of Education; MDOT = Michigan Department of Transportation; MPSC = Michigan Public Service Commission; ORD = Michigan Office of Rural Development.

Source: Authors.

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