Electric vehicle manufacturing could reduce auto parts trade in the US Midwest

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The race to build electric vehicles in the United States is heating up as new rounds of investment flow out of Washington. Workers in the former heart of the auto industry fear being left behind.

“When we look carefully at what’s going on in the factory, there won’t be fewer workers,” Keith Cooley, former Michigan Department of Labor chief, told CNBC. “There will be different people building the cars.”

Researchers believe jobs in modern factories will require more education and may be less available than they were in the past. They estimate that electric vehicles could require 30% less manufacturing labor compared to conventional cars. “The lines that conduct oil or gas around an internal combustion engine will no longer be there,” Cooley said.

This shift could affect automotive parts suppliers, many of which are concentrated near Midwestern cities such as Kokomo, Indiana; Lima, Ohio; and Detroit, Michigan.

“The automakers in some of these places actually make a decent amount of tax revenue and employ a lot of people in the surrounding community,” Indiana University professor and contributor Sanya Carley told CNBC. Industrial Heartland study. “So the fate of these companies is very intimately tied to the fate of communities.”

Washington leaders hope two key laws, the Cut Inflation Act and the CHIPS Act, which were signed into law by President Joe Biden in August, will bridge that future. These laws authorize billions in incentives for companies that pursue clean energy manufacturing.

With funding underway, automakers are now wondering how quickly demand for electric vehicles will materialize. In 2021, 9% of global auto sales were electric vehicles, according to the International Energy Agency.

Watch the video to learn more about the impact of the electric vehicle revolution on the economies of states in the US Midwest.

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