Electric vehicle production could shrink US Midwest auto parts trade

The race to build electric cars in the US is heating up as new rounds of investment from Washington. Workers at the former heart of the auto industry fear of being left behind.

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

The researchers believe that modern factory jobs will require more education and possibly less ability than in the past. They estimate that electric vehicles can require 30% less production labor when compared to conventional cars. “The lines that run to carry oil or gas around an internal combustion engine won’t be there,” Cooley said.

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

“The car companies in some of these places actually make up a sizable portion of the tax revenue, and they employ a lot of people in the surrounding communities,” said Sanya Carley, Indiana University professor and contributor to the Industrial center research, told CNBC. “So the fate of these companies is very closely tied to the fate of the community.”

Leaders in Washington hope two main pieces of legislation, Inflation Reduction Act and CHIPS Act, signed into law by President Joe Biden in August, will bridge that future. These laws allow billions of dollars in incentives for businesses pursuing clean energy production.

With capital on offer, automakers are now wondering how quickly the need for electric vehicles will materialize. In 2021, 9% of global car sales will be electricaccording to the International Energy Agency.

See video to learn more about how the electric vehicle revolution will impact the economies of states across the Midwest.

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