Driving Into An Electric Vehicle Future
Date Posted: March 22, 2022
Posted In: Discussion,
From Area Development: It seems like the ultimate good-news story. The shift toward electric vehicles will greatly improve the long-term climate health of the planet. It’ll improve human health, too, by reducing pollution. It’ll create thousands of jobs in new industries, with new manufacturing operations lifting local economies. What’s not to like?
Don’t forget that disruptive technologies are, well, disruptive. One person’s opportunity, one community’s economic development win, quite often means disruption for someone else’s livelihood and some other community’s economy. The story is only starting to unfold, but the transition to electric vehicles, or EVs, is shaping up to be the automotive industry’s most important story going forward.
Powering Up the Changes
“Some traditional automotive companies — particularly parts companies dedicated to the internal combustion engine — if they don’t change they aren’t going to survive the EV transition,” according to Dennis Cuneo, who owns DC Strategic Advisors and has years of background as an automotive industry executive, including with Toyota. “Companies that produce engines, engine parts, gas tanks, exhaust systems — those products are eventually going to be phased out. And so will the plants in communities that make them, unless they are transformed into something else.”
“If you are making headliners, sunroofs, and certain interior components, you might be largely unaffected,” agrees Bernard Swiecki, director of research at the Center for Automotive Research in Ann Arbor, Michigan, and director of its Automotive Communities Partnership. “But if you are making powertrain components or fuel tanks, that’s going to impact your bottom line.”
Meanwhile, Cuneo says, there’s a world of opportunity out there for companies and communities that are riding EVs into the future. For “plants that make battery packs and motors, inverters, chargers, there will be a lot of opportunities there, a lot of new plants and parts to be made,” he notes.
East Asia is presently the dominant location for production of lithium-ion batteries, or LIBs, used in a lot of consumer electronics and increasingly used to power EVs, according to Alexandra Segers, general manager of Tochi Advisors LLC. “Currently, China, Japan, and Korea collectively host over 80 percent of all LIB cell and automotive LIB cell manufacturing capacity,” she says. Production experience and well-developed supply chains may keep it that way for a good while.