CLEVELAND, Ohio — The shift from gasoline-powered engines to all-electric vehicles could be both an opportunity and a threat to Ohio’s economy. But there’s reason to believe the Buckeye State is in the driving seat.
Automakers are spending billions of dollars to get off gas. EV manufacturing could create thousands of new jobs, but also thousands of jobs associated with making gas-powered vehicles obsolete.
That’s why Ohio has so far successfully fought to have electric vehicles built in Ohio.
“It’s an exciting time,” said Rick Stockburger, President and CEO of BRITE Energy Innovators, an incubator based in Youngstown. “We are seeing a shift in market forces. Ohio can either take advantage and lead or wait and fall further behind.”
According to the latest August data, there are 91,600 auto jobs in Ohio — either assembling vehicles or manufacturing parts. That’s down from August 1990, when there were 144,000 auto jobs in Ohio. However, the state still has the second largest automotive workforce in the country, according to US Bureau of Labor Statistics Data.
The auto industry is in transition. Companies are racing to develop, build and mass market electric vehicles. And that will mean many changes in their supply chains over the next few decades, said Ned Hill, professor of economic development at Ohio State University and former dean of urban affairs at Cleveland State University.
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How quickly they will transition from gasoline-powered internal combustion engines, often referred to as ICE vehicles, to electric vehicles is an open question. General Motors said it will only sell electric vehicles by 2035. And California regulations would phase out gas vehicle sales in about 12 years.
But drivers will have the final say, and many people are skeptical of such a rapid transition.
Automakers are throwing billions at electric vehicles
Auto companies are spending money to change their operations right now, including in Ohio.
Ford plans to spend $22 billion on electric vehicles by 2025 and committed to a $1.5 billion investment that would secure the future of Ohio’s Avon Lake assembly plant for the construction of electric vehicles. GM says it will spend $35 billion on electrification by 2025 and has committed to a $760 million conversion of its Toledo transmission factory into an electric drive unit manufacturing facility.
GM and LG Chem spent more than $2 billion building Ultium Cells, a battery factory, in Lordstown. And Honda and LG on Tuesday announced a $4.2 billion plan to build an electric vehicle battery factory in Fayette County south of Columbus and convert existing Honda plants in Ohio to manufacture electric vehicles.
Electric vehicles look like their petrol-powered counterparts. But Scott Colosimo, CEO of the electric motorcycle manufacturer LAND in Cleveland, said their manufacture was a different story.
“It’s like going from horse-drawn carriages to gas cars,” he said. “That’s a huge difference.”
An electric vehicle has neither an exhaust system nor a complex gearbox. And a typical combustion engine will have many more parts than an electric motor.
EVs will require unique parts – batteries, inverters, on-board chargers and complex wiring systems – but will use fewer components overall than an internal combustion engine vehicle.
According to Stockburger, batteries will also undergo many changes over the next ten years.
Colosimo said startups like LAND will start from scratch with electric vehicles. You will use advanced technology such as CNC bending machines and laser cutters and you will choose flexibility.
The big players like Ford and GM are more likely to “copy and paste” their old ways when making the switch, Colosimo said.
Every vehicle, whether gas-powered or electric, requires thousands of parts. Automakers handle big ticket items and assemble vehicles, but they turn to other companies, big and small, to fill the supply chain.
And many parts come from overseas. Colosimo said there are many small parts like headlights, turn signals and other simpler electronics that are mostly imported.
Some industries, like battery technology, are dominated by international companies like LG Chem.
And parts that require a lot of labor to make, like electric motors, are usually outsourced, Hill said.
Hill said automakers will likely bring some of those capabilities in-house, like engines. And it makes sense to build heavier items like batteries closer to the assembly plants in the US. But the supply chain itself is being overhauled in anticipation of electric vehicles.
Jonathan Bridges, managing director of automotive at JobsOhio, said economic development leaders are feeling the pressure to bring new jobs to the state amid this transition. But they also feel they have a competitive advantage.
“This is the perfect opportunity for us to show what we were made of,” said Bridges.
Ohio’s location and workers give it a boost
Ryan Augsburger, president and CEO of the Ohio Manufacturers Association, said Ohio has several things to its advantage.
One advantage is the proximity. Proximity to assembly plants and good connections to motorways and rails is an advantage, especially for the heavy batteries that are required in electric vehicles.
Likewise the existing workforce. He said many workers needed retraining. But finding workers is one of the biggest challenges facing manufacturers.
“If we can be the state that hires the manufacturing workforce properly, watch out,” Augsburger said.
The bulk of Ohio’s auto jobs, about 68,000 of the 91,000, are in parts manufacturing. Many more are employed in plastics and rubber, metal and electronics manufacturing.
Their success is tied to the success of Ohio’s transportation industry, Augsburger said. Gas-powered vehicles driving away could create a ripple effect across multiple industries.
“To say that Ohio is at high risk would be a gross understatement,” Augsburger said.
Bridges said automakers aren’t running from their workforce, they’re doubling it. Companies with a presence in Ohio like Ford, Honda and GM are investing more money in the state. And they’re converting gas-powered vehicle jobs to electric vehicle jobs.
And manufacturers from abroad, such as Foxconn and LG Chem, are choosing to enter the state.
“I think it’s a double-edged sword and I think we’re in the best possible position,” Bridges said.
There are other professionals, said Augsburger. Ohio has an attractive business environment when it comes to taxes, infrastructure and access to electricity, he said. And there is access to fresh water needed to make batteries.
Ohio’s “bread and butter” is the powertrain – it makes things that move vehicles. And the “moving” part of vehicles changes the most.
JobsOhio is pushing for EV jobs, but it’s also not failing companies in the gas car supply chain.
Some companies will switch to electric vehicles ahead of time, but that won’t make gas-powered vehicles go away, Bridges said. And the companies that remain in the ICE vehicle market can attract more customers. JobsOhio will also support these companies, Bridges said.
“Both companies are profitable and both companies will be successful,” Bridges said.
Neither Bridges nor Augsburger said the future necessarily means going electric. They’re all the rage right now, but whether consumers will quickly gravitate towards them is an open question. And another technology, like hydrogen-powered vehicles, could make big strides.
“We see Ohio as a vehicle state, past, present and future,” Augsburger said. “And we support policies to ensure we continue to be the vehicle state.”