Electric Vehicles: Industry on the Move

Candi Clouse, PhD

July 07, 2020 16:34

INTRODUCTION

According to Bloomberg New Energy Finance, more than half of the cars produced by 2040 could be electric. This poses a huge change for traditional gasoline combustion engine production that has dominated the U.S. landscape. Currently, electric vehicles make up only a small portion of the market, representing only about 7% in 2024. Because this industry is both relatively new and still small, it isn’t represented well in the automobile manufacturing industry.

PRODUCTION

The production of new vehicles of any type will fall under Industry 324 - Automobile and light duty motor vehicle manufacturing and 325 - Heavy duty truck manufacturing. However, these will be based on the status of the total Industry in the Data Year. That means that it includes all types of vehicles regardless of engine type.

The best way to model the production of new electric vehicles is using the Industry Impact Analysis (detailed) Event Type. In this Event Type, you can enter values you may have for Wage & Salary Employment, Employee Compensation, and spending on Intermediate Inputs (and also edit the Spending Pattern) or Output. Then, you can enter a zero for Proprietor Employment, Proprietor Income, Taxes on Production & Imports, and Other Property Income to reflect that public and nonprofit organizations are not paying these. And that's it. IMPLAN will calculate the Direct Effect for you!

CHARGING

The construction would fall under Industry Construction of new commercial structures, including farm structures. The operations of those facilities would usually fall under Industry Retail - Gasoline stores or whatever business is operating the station.

Charging stations do not take a lot to set up for operations. Treehugger notes that an electrician can install the unit and then it’s ready to go. Some of these charging stations are built in the U.S. and if they are being sourced from within your Region, this can be modeled as an Industry Event in All other miscellaneous electrical equipment and component manufacturing. Coupling this with associated costs to a local electrician in Industry 50 will round out the impact for installing charging stations. Here we see the addition of $4M in charging stations and $250K in electrician installation costs.

SUBSIDIES & SAVINGS

Many states offer rebates to people purchasing electric vehicles which can result in savings of thousands of dollars. These savings can be modeled using Household Income Events. Again, think through if the rebate is enough to offset the potentially higher cost of the electric car in the first place. For example, if I purchase an electric car for $45K instead of a combustion car for $40K and I get a rebate of $2K, I still paid $3K more for the electric vehicle. Obviously there will be tradeoffs in terms of the environmental impact as well, but that’s a whole other dataset.

There could be savings to consumers because the price to power your electric car is lower than purchasing gasoline. This can also be modeled using Household Income Events. There could also be overall savings to the economy from a switch from reliance on one type of energy, say fossil fuels that are imported, to wind energy that is produced locally. This switch is also perfect for a Net Analysis.

If we know that higher income Households will see significant savings, this can be modeled by a few Household Income Events. In this example, we are told that Households that earn between $100-150K will save $500K, Households that earn between $150-200K will save $750K, and Households that earn more than $200K will save $1.25M, we create one Event for each earning level.

Once these additional Events have been analyzed, again using the Filter on the Results screen, choose only the three Household Events and click Run to see the Results from the Household savings.