Analysis of the Electric Vehicle Industry

1 CREATING THE CLEAN ENERGY ECONOMYA nalysis of the Electric Vehicle IndustryCCrreeaattiinngg tthhee CClleeaann EEnneerrggyy EEccoonnoommyy Analysis of the Electric Vehicle Industry Primary Authors Jennifer Todd is an Economic Development Associate at IEDC. Jess Chen is a Research Fellow and a PhD candidate at American University. Frankie Clogston is an IEDC Consultant and a PhD candidate at Johns Hopkins University. Primary Editors Liz Thorstensen, Vice President of Knowledge Management & Economic Development Practice, Tye Libby, Associate, Knowledge Management and Development Acknowledgements IEDC is grateful to the Rockefeller Brothers Fund for its generous support of this research project.

2 Special thanks Lauren Avioli, Emily Brown, and Patrick McHugh for research support, and Mishka Parkins, who provided technical assistance for the creative design of the report. Copyright 2013 International Economic Development Council This report was made possible by a grant from the Rockefeller Brothers Fund. Paul Krutko, FM President and Chief Executive Officer, Ann Arbor SPARK Chairman of the IEDC Board Jay C. Moon, CEcD, FM President and CEO, Mississippi Manufacturers Association Immediate Past Chairman of the IEDC Board Jeffrey A.

3 Finkle, CEcD President & CEO International Economic Development Council International Economic Development Council 734 15th Street NW / Suite 900 Washington, DC 20005 | Phone: (202) 223-7800 | Fax: (202) 223-4745 International Economic Development Council IEDC is the world's largest membership organization serving the economic development profession, with over 4,500 members, and a network of over 25,000 economic development professionals and allies. From public to private, rural to urban, and local to international, our members represent the entire range of economic development experience.

4 IEDC is dedicated to helping economic developers do their job more effectively and raising the profile of the profession. When we succeed, our members create more high-quality jobs, develop more vibrant communities, and generally improve the quality of life in their regions. The issue of sustainability has been designated a strategic priority by the IEDC Board of Directors. Further, sustainability and policy responses to climate change are growing issues for our members. Through a range of services, including: conferences, training courses, webinars, publications, research and technical assistance efforts, we are striving to be on the cutting edge of understanding the opportunities and challenges stemming from sustainability, climate change and economic transformation.

5 For more information about IEDC visit INTERNATIONAL ECONOMIC DEVELOPMENT COUNCIL 3 TTAABBLLEE OOFF CCOONNTTEENNTTSS Introduction to Electric Vehicles .. 4 Job Creation Potential of Electric Vehicles .. 12 The State of the Electric Vehicle Market .. 23 Hurdles and Solutions: Electric Vehicles Market .. 61 Reduce the Cost of PEVs .. 63 Expand Charging Infrastructure .. 73 Educate Consumer Perception .. 83 Convention Gas Cars: Lessons for Electric Vehicles .. 90 INTERNATIONAL ECONOMIC DEVELOPMENT COUNCIL 4 IINNTTRROODDUUCCTTIIOONN TTOO EELLEECCTTRRIICC VVEEHHIICCLLEESS Of all the oil consumed in the , 70 percent is used for transportation.

6 Further, passenger vehicles use 70 percent of transportation Globally, a rising middle class in China and India is causing demand for passenger cars to balloon, and with it, demand for oil. By 2050, there may be as many as billion cars on the road, compared to 750 million in This type of demand represents both a challenge and an opportunity to capitalize on new Vehicle technologies, and in the process, reap substantial economic development benefits. In a world where oil is a limited resource, an alternate source of transportation fuel electricity is not only a smart investment, but as some would say, it is an inevitable one.

7 Further, the switch to Electric vehicles will generate demand for existing jobs and create new jobs as well. As study after study confirms, job growth in Electric Vehicle industries will outweigh any reduction of jobs in traditional fuel industries, resulting in net job growth. Electric vehicles create additional economic development opportunities by improving quality of life, reducing energy spending, and decreasing reliance on foreign oil. TThhee IImmppoorrttaannccee ooff EElleeccttrriicc VVeehhiicclleess ttoo EEccoonnoommiicc DDeevveellooppmmeenntt Like any transformative new technology, Electric vehicles create a variety of potent economic development challenges and opportunities.

8 While the Electric Vehicle market is still at a relatively early stage of development, it is poised to reshape industries and communities the world over. This section provides a quick overview of the potential benefits of Electric vehicles so that economic developers can better assess what the evolution of this market will mean to their specific local communities. 1 Harvard Kennedy School, Belfer Center for Science and International Affairs. (2011, July).

9 Will Electric Cars Transform the Car Market? Cambridge: Lee, H. & Lovellette, G. Retrieved from 2 Harvard Kennedy School, Belfer Center for Science and International Affairs. (2011, July). Will Electric Cars Transform the Car Market? Cambridge: Lee, H. & Lovellette, G. Retrieved from INTERNATIONAL ECONOMIC DEVELOPMENT COUNCIL 5 EElleeccttrriicc VVeehhiicclleess CCrreeaattee JJoobbss At this point it is difficult to reliably estimate the total job creation potential of Electric vehicles.

10 More Electric vehicles, however, would also likely lead to some job losses in the oil Industry . With that said, there is good reason to expect that electrification of personal transportation can drive job creation in a host of industries. More efficient automobiles require more technology, which are designed and produced by adding workers to the auto Many of these jobs would be created in industrial sectors closely tied to auto manufacturing, advanced batteries, and research and development. Moreover, Electric vehicles are much cheaper to operate than conventional vehicles.