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Biden's electric vehicle push puts new focus on jobs

President Biden's swift effort to re-establish stricter fuel efficiency mandates, along with his broader push toward vehicle electrification, is as much about creating new jobs as it is protecting the environment.

Why it matters: The U.S. lags far behind the rest of the world in electric vehicle adoption. Catching up will require big investments in EV production — including battery cell manufacturing and mining of raw materials — to avoid dependence on imports and foreign supply chains.

  • Biden's goal: 1 million new auto industry jobs in manufacturing, supply chains and infrastructure like EV charging stations.
  • About 757,000 people currently work in the auto and parts sector alone, down from a peak of 1.1 million in 2000, per the U.S. Labor Department.

Driving the news: On his first day in office, Biden moved quickly to unravel many of former President Donald Trump's environmental policies.

  • Among his first actions: directing the EPA and the Transportation Department to re-establish stricter fuel efficiency mandates, which Trump had weakened.
  • Tighter standards for fleet-wide emissions would almost certainly compel automakers to build more EVs.

Biden has made boosting electric vehicles a top priority and pledged to add 500,000 charging stations and make all federal fleets fully electric.

  • He also supports expanded consumer tax credits for EV purchases.
  • It worked in Europe, where Germany and other countries folded EV incentives into their coronavirus stimulus packages last year.
  • EVs jumped from roughly 3.3% of total European sales in 2019 to an estimated 11% in 2020, says Nathan Niese, Boston Consulting Group's associate director for electrification and climate change.
  • In the U.S., plug-in vehicles account for only about 2% of total sales.

Yes, but: it's not just about stimulating demand. The U.S. needs to move quickly to secure the necessary batteries and raw materials that go into them, says Robbie Diamond, CEO of Securing America’s Future Energy (SAFE).

  • China is poised to dominate EV production and supply chains if the U.S. does not act quickly to boost its output.
  • Of 142 lithium-ion battery megafactories under construction globally, 107 are set for China, versus nine in the U.S., according to a SAFE research report.
  • All of the top battery manufacturers are based in Asia and most of the lithium, nickel and cobalt used to make them comes from outside the U.S.

If the U.S. goes big on electric vehicles to compete with China — a “minerals-to-markets” approach as laid out in SAFE’s roadmap — it would create more than 640,000 jobs, Diamond tells Axios, previewing new research.

  • But labor unions fear the opposite. EVs have 80% fewer parts overall, making them easier to assemble, according to a UAW analysis.
  • However, a BCG study concluded it takes roughly the same labor hours to assemble an electric vehicle as it does a traditional vehicle.
  • It's just that much of the labor shifts upstream, to suppliers that make batteries, electric motors, electronics and thermal systems, which will require retraining.

The bottom line, says SAFE's Diamond: "We're not asking auto workers to become Google programmers. There will be jobs. The question is will we let them happen in Asia — or here?"

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