Building An Electric Transportation Supply Chain In The United States

Electric vehicle charging

Advanced Energy Economy engaged BW Research Partnership to examine the economic and job potential related to the development of the Electric Transportation industry in the U.S., focusing on the size and scope of the current workforce and existing businesses, and exploring growth opportunities throughout the supply chain as the shift to electric vehicles—and the supporting infrastructure—continues.

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Key Findings

In 2019 there were an estimated 15,200 businesses with 155,000 workers involved in ET-related activity across the country.

These workers and businesses can be found in all 50 states, as well as in Washington, D.C. The number of ET-related workers is projected to nearly double during the five years that follow, reaching 296,000 workers by 2024.

There are 2.1 million workers in Immediate Adjacent and Secondary Adjacent Manufacturing Industries.

Workers in these Adjacent Industries have skillsets that would allow them and the companies they work for to transition to ET-related work with little additional training or upskilling required. The similarities in knowledge and skillsets suggest that ET-related jobs could offer a lifeline to workers in Immediate Adjacent Manufacturing Industries, which saw more than 15,000 jobs disappear in Michigan, Ohio, and Kansas alone between 2014 and 2019.

ET activity is estimated to have contributed $29 billion in Gross Domestic Product (GDP) in 2019.

This is roughly equivalent to the GDP contributions of Architectural Services, Surgical and Medical Instrument Manufacturing, and Automotive Parts and Accessories Stores.

Manufacturing is a large component of the ET value chain.

Four in 10, or roughly 61,000, ET-related jobs are in Manufacturing. Repair & Maintenance and Wholesale Trade, Distribution, and Transportation also account for substantial portions of the ET value chain.

The U.S. ET sector is primed to grow rapidly, but supply chain bottlenecks in components, such as lithium-ion batteries and semiconductors, may hinder this growth.

While many aspects of the U.S. ET supply chain are prepared for a significant increase in demand, lithium-ion batteries and specialized microchips have the potential to act as constraints. Expanding domestic production of these advanced technologies can make supply chains more resilient while bolstering the nation’s innovation economy.

Incentive programs to accelerate demand and support domestic manufacturing will grow the industry and improve the domestic supply chain.

Tax credits and other incentives for the purchase of light-, medium-, and heavy-duty electric vehicles, as well as charging equipment, will accelerate broad EV adoption by households, businesses, and governments. Additionally, policies that support manufacturers of EVs and key supply chain components will further incentivize domestic growth and job creation.

Additional considerations are needed to ensure retraining opportunities for affected workers.

While the transition from internal combustion engine (ICE) vehicles to EVs will largely transfer existing jobs and create new opportunities, some parts of the current automotive industry could face hardship. More than 63,000 people in the U.S. are employed in Motor Vehicle Gasoline Engine and Engine Parts Manufacturing, and demand for this work will decline as ICE vehicles comprise a smaller portion of vehicles produced and sold. Efforts that examine these workers’ skills and transition opportunities will be essential in fostering an ET economy that benefits all Americans.

Policy Recommendations

  1. Expand and fully fund consumer and business incentives programs.

    Extending and expanding existing tax credits for light-duty EVs and associated charging infrastructure will help foster broad EV adoption.

  2. Increase the national fleet of electric school buses by providing incentives.

    By offering financial incentives to schools for the purchase of electric school buses and the associated charging equipment, the country could capitalize on the many benefits of electric school buses, including improved air quality within communities and cost savings for school districts. Incentive programs should be especially focused in areas disproportionately impacted by poor air quality and in school districts with the greatest financial need.

  3. Electrify government-owned fleets, including transit fleets.

    Governments can use procurement powers to affordably electrify their fleets, stimulate the economy, create fuel savings, and improve public health.

  4. Expand programs aimed at bolstering domestic manufacturing of EVs and critical supply chain components.

    Supporting the transition of the domestic automotive industry to electrified transportation will ensure that the U.S. remains globally competitive and retains domestic manufacturing jobs. Manufacturers who source and retain high domestic content should be rewarded with additive beneficial policies.

  5. Expand the availability of workforce development programs, such as the Electric Vehicle Infrastructure Training Program (EVITP) and other public and private certification courses, across the country.

    Further workforce trainings are important training tool that helps expedite the development of skills needed to work on construction and maintenance related to EV charging infrastructure.

  6. Additional considerations are needed to ensure retraining opportunities for affected workers.

    While the transition from internal combustion engine (ICE) vehicles to EVs will largely transfer existing jobs and create new opportunities, some parts of the current automotive industry could face hardship. More than 63,000 people in the U.S. are employed in Motor Vehicle Gasoline Engine and Engine Parts Manufacturing, and demand for this work will decline as ICE vehicles comprise a smaller portion of vehicles produced and sold. Efforts that examine these workers’ skills and transition opportunities will be essential in fostering an ET economy that benefits all Americans.

  7. Bolster research and development and “moonshot” initiatives.

    America’s research and development (R&D) institutions have the reputation for being the best in the world. Leveraging these assets to push the frontiers of technology and remove barriers will be crucial in making ET more cost-effective and supply chains more robust. Opportunities for R&D initiatives that are focused on lithium and rare earth metal mining and extraction, advanced battery technologies and materials, and advanced semiconductor design and production will help ensure that the ET supply chain is resilient, reliable, and geared towards technologies of the future.