Fleet Electrification Roadmap

40 primer: electrification of the transportation sectorspecial sectionspecial sectionfleet electrification roadmap 41A Growth Sector for JobsFIGURE P25U.S. Unemployment RateEighteen months after the official end of the 2007-2009recession, the U.S. employment outlook remains troubling.Current figures place the official U.S. unemployment rateat 9.6 percent, and expectations are that the jobless ratewill average 9.6 percent in 2011, well above normal levels. 82In short, while the Great Recession officially ended in2009, many Americans are still waiting to feel the recovery.Though nearly all sectors of the economy have yetto resume hiring in earnest, manufacturing employmenthas been hit particularly hard. Since the recession beganin December 2007, the United States has shed nearly 2.1million manufacturing jobs, and total manufacturingemployment now stands at just 11.7 million workers—a 32percent decline from January of 2001. 83 And while only 1in 10 Americans are currently employed in manufacturing,the erosion of the domestic industrial base has clearlystunted efforts to stimulate aggregate job creation. 84The past several years also witnessed an inflectionpoint in the global industrial landscape: 2009 marked thefirst year in which U.S. manufacturing capacity trailedChinese capacity in its share of the world total. 85 Theascendency of Chinese manufacturing can be attributed toa myriad of industries and factors, but it has in part beendriven by the rise of the Chinese motor vehicle industry.Chinese production of motor vehicles first surpassed U.S.output in 2008, and the gap increased by a wide marginin 2009. 86 Total Chinese vehicle production reached 13.7million units last year—an increase of nearly six-fold fromthe beginning of the decade, and more than double the U.S.total of 5.7 million domestically-made units. 87In the United States, the twin shocks of rapidly escalatinggasoline prices between 2007 and 2008 and thesevere recession that followed through 2009 exacted asignificant toll on the auto industry. Total auto sales averaged16.1 million annualized units in 2007. 88 As oil pricessteadily rose throughout 2008, sales plummeted, falling20 percent off their 2007 mark. 89 The recession and82 International Monetary Fund, World Economic Outlook 2010, Table 2.2, at 70.83 U.S. Department of Labor, Bureau of Labor Statistics, U.S. EmploymentSituation, Table B-1 (October 6, 2010), available at http://www.bls.gov/news.release/empsit.toc.htm.84 Id.85 United Nations, Industrial Statistics, available at http://unstats.un.org/unsd/industry/default.asp.86 Ward's Automotive Group, Ward's Motor Vehicle Facts and Figures 2010.87 Id.88 Motor Intelligence, available at http://www.motorintelligence.com/.89 Id.financial crisis pushed auto sales to a low of just 9.2 millionannualized units in September 2009, and by August2010 sales had rebounded to just 11.3 million annualizedunits. 90 As a result of reduced sales and declining domesticoutput, the number of U.S. workers building vehicles andtheir components has dropped dramatically. Between2000 and 2009, total American workers employed inmotor vehicle and auto parts production fell by more than50 percent, from 1.13 million to approximately 560,000. 91Electrification of transportation offers a rare opportunityto counter these dynamics. Early investment inadvanced battery manufacturing has put the UnitedStates on competitive global footing for the jobs andother economic benefits that could be associated withthis industry. Dozens of plants building advanced batteriesand power electronics throughout the rust belt arealready employing thousands of American workers, and athriving domestic market for electric drive vehicles coulddramatically expand this number. 92The United States will face strong competitionfor dominance over this sector and its associated benefits.The Chinese government has recently committed$15 billion to an alliance of state-run companies leadingresearch and development and standardization efforts. 93China has also announced ambitious plans to deployEVs in up to 20 pilot cities in which strong incentivesfor vehicles and infrastructure will be funded by localgovernments as well as the national government. 94Throughout Europe, high retail fuel prices and stringenttailpipe emissions standards are driving sharp increases invehicle efficiency, and electric drive is among a handful oftechnologies that can meet new and forthcoming standards.Much of the technology that will power electric drivevehicles—from HEV to PHEV and EV—was invented anddeveloped in the United States, and significant governmentinvestment is being allocated to support the industry. A comprehensiveapproach to supporting early demand for gridenabledvehicles will help capitalize on these investments.90 Id.91 DOE, ORNL, TEDB 2009, Table 10.18.92 Thomas Grillo, “A123 opens Michigan plant,” Boston Herald, September24, 2010; Sebastian Blanco, “EnerDel shows off battery productionfacility, plans for $237 million expansion,” Autoblog, January 22, 2010;Carl Apple, “How do I Land a Battery Plant Job?” February 24, 2010.93 David Barboza, “China to Invest Billions in Electric and Hybrid Cars,”New York Times, August 19, 2010.94 Owen Fletcher, “China Ministry: Government Has Consensus ToPromote Electric Cars,” Dow Jones Newswire, October 28, 2010.10%86420198019821984198619881990FIGURE P26Share of Global Manufacturing Output30%2520151050198019841988FIGURE P27U.S. Vehicle Manufacturing Employment1,200 Thousand Workers1,0008006004002000199019921994199619981992United States2000Source: Figure P25 — International Monetary Fund, World Economic Outlook 2010; Figure P26 — United Nations Statistics; Figure P27 — DOE, ORNL, TEDB Ed. 291992199420021996China200419981996200620002002200820002004200620042008Parts - OtherMotor Vehicle - OtherProduction Workers - Parts20102008Production Workers - Motor Vehicles