������Ƶ

Auto manufacturing remains a��cornerstone of the state economy,��responsible for at least 700,000 of the state estimated 5 million jobs.

This year, the industry faces change and uncertainty from several fronts, as automakers make massive investments in shifting their businesses toward electric vehicles and political uncertainty starts to weigh on consumers.

Michigan also went all-in on EV battery manufacturing over the past few years, offering incentives topping $1 billion to five companies planning projects in the state and making plans to retrain workers to fill the new jobs. As Bridge Michigan reported in June, all of those battery factories��have faced delays.

The pauses, paired with the state investment, show the high��stakes for Michigan as the U.S. auto industry balances today market.

Here is some news to watch from the industry at midyear:

1. EV sales remain a moving target

Monthly sales totals for EVs continue to fluctuate at midyear, with the��spring downturn��giving way to some higher-than-expected results by the end of June.

General Motors, for example,��broke its EV sales records��in the first half of the year when it sold 38,355 electrified vehicles. Last year it sold 75,386 EVs; about twice what it has sold so far this year.

The Detroit-based automaker expects to offer 10 EV models by year-end as it ramps up production and model launches. At the same time, GM is sticking to its 2024 production target of up to 250,000 EVs, down from its initial plan to make as many as 300,000.

Overall, GM sold 1,290,319 vehicles in the first half of the year in the U.S., down 0.4%.

Tesla, the nation leading EV seller, also saw sales top forecasts, with��433,956 vehicles sold.

However, the automaker’s total represented the second-straight quarterly decline, with a 4.8% drop from April to June, as market share shifts among more manufacturers.

Sales swings��are expected to last for several years,��Reuters recently reported.

“Some quarters will be up, some quarters will be down, but all in all, it won’t be as strong a growth as we saw over the last few years,” Sam Fiorani, vice president at research firm AutoForecast Solutions, told the news outlet.

Some say��EV sales could rise 20% this year in the U.S., which is the world second-largest vehicle market. Improving battery technology and automaker moves to offer lower-priced vehicles could be growth factors.

Others still expect EV sales to hover��around 8%��of new vehicle sales as half of U.S. shoppers��still won’t consider an EV.

2. The election may keep auto shoppers on the sidelines

A full three-fourths of automobile shoppers expect the outcome of the U.S. presidential election in November to impact the economy, according to a��late-June report from automotive market specialists Cox Automotive.

As a result, many of those in the market for a new car��are considering a wait-and-see approach through fall, instead of buying at midyear. Only 26% of shoppers expect prices to fall after the November election.

The stall may reflect concern over the��wide gap��between the likely presidential nominees, Democrat President Joe Biden and former President Donald Trump, a Republican.

Biden has championed green energy initiatives, including EV subsidies for manufacturers and buyers, and tariffs on imports from global EV leader China. Trump has said he against Biden-era regulations that support the EV shift.

The Cox findings “underscore a high level of uncertainty in the auto market,” the research found, “caused partly by expectations that the November election will reshape the economy, change interest rates, or impact inflation.”

University of Michigan��economists predict��that U.S. light vehicle sales —��the cars, SUVs and trucks bought by consumers and some businesses — will reach 15.7 million this year, up by 200,000.

“This new research reminds us that elections breed uncertainty, and when big-ticket purchases like automobiles are on the line, uncertainty is the enemy,” Vanessa Ton, Cox senior manager of research and market intelligence, said in a statement.

Inflation also has been a buyer concern. Auto loan rates have��doubled since fall 2021, rising from under 4% to nearly 8%. The increase parallels interest rate hikes from the Federal Reserve as it sought to cool inflation. Over that time, the monthly payment for a typical 60-month loan for $47,000 — the average price of a new vehicle — increased by about $83.

3. Auto dealers also expect changes this year

Cox research also found that auto dealers, more so than their shoppers, believe the election will affect the economy. That sentiment spans the political parties.

“Dealers expect inflation to get worse after the election,” according to the Cox report from the second quarter.

Concerns over the political climate have increased this year, with 36% of dealers in the U.S. saying it is a factor holding back business. That is up from 33% in the first quarter and 29% at this time last year.

“In many ways, the political climate is a surrogate for ‘uncertainty,’” Cox Automotive Chief Economist Jonathan Smoke said in a statement.

“Many dealers and consumers believe the election outcome will impact the economy in some way — either good or bad — and that expectation of change is causing paralysis in the market.”

Nearly half of dealers polled expect consumer spending to fall, and 38% expect vehicle sales to worsen, while 31% say sales will improve or not be impacted by the election.

Most shoppers won’t switch powertrains to an EV, Cox also found, and about half are against government mandates supporting EVs.

4. EV battery workforce growth

What will the workforce look like from Michigan expected EV battery factories?

A��study released in May��by the Upjohn Institute for Employment Research in Kalamazoo offers some insight into what types of jobs will be generated across the full supply chain by lithium-ion battery production in the U.S., including in Michigan.

The report, researchers said, could guide workforce training programs over coming years.

The conclusion: “The transition from internal combustion engines to electric vehicles will require substantial training or retraining of workers to ensure that the United States has a chance to reach and sustain its share of the global automotive industry.”

In 2023, 63,667 U.S. workers were involved with EV battery production, from mining and other raw material production to service, repair and distribution.

That number is expected to grow to 310,287 by 2030, the Upjohn researchers said, based on EVs reaching about 40% of sales.

������Ƶ 32% of the jobs will require a bachelor’s degree or higher, leaving about 68% requiring as little as a high school diploma. Many of the jobs will require significant on-the-job training, the researchers found.

The largest share of jobs — about a third — will be assemblers in the factories. Those jobs will not require college, with similar existing jobs paying $37,280 to $50,850 per year in 2022.

In Michigan, 7,533 workers were employed in the EV battery supply chain in 2023. Over the next decade, that projected to increase to 30,527. The breakdown will be similar to the national one, the report said, with about two-thirds of workers in lower-paying factory work.

The study did not address how many of today’s auto workers could make the shift to EV production, an issue that the United Auto Workers prioritized in 2023 contract talks.

Michigan also formed a��Community & Worker Economic Transition Office��in February to address the expected employment shift.

This article is being republished through a syndication agreement with��Bridge Michigan. Bridge Michigan��is Michigan largest nonprofit news service and one of the nation leading and largest nonprofit civic news providers. Their coverage is nonpartisan, fact-based, and data-driven. Find them online at��.