A new report from the International Energy Agency confirms what you probably knew already: The rush is on to electrify transportation.
Across the globe, 14% of new cars registered last year were electric, and 26 million electric vehicles were on the road, up a stunning 60% just from 2021. China is leading the way in adoption, followed by Europe and then the U.S., where 8% of new cars sold in 2022 were electric.
Sales are expected to grow in 2023, which is a safe bet given how leading automakers are going all-in on producing EVs. Intense competition among car companies, coupled with high fuel costs and government incentives to combat climate change, stand to make the transition quicker than it otherwise might be.
The shift away from internal-combustion engines has opened the door for tech-centric upstarts like Tesla, Rivian and Lucid, not to mention Chinese manufacturers who are turning out top-quality EVs. The old guard is under pressure to change, putting the future footprint of the auto industry up for grabs.
While we welcome business opportunities from the EV boom, we also know the Midwest has a lot to lose as the game changes. Legacy automakers and their suppliers provide some of the best blue-collar jobs around and make high-impact contributions to local economies. This region cannot afford to lose its motor mojo.
Illinois, unfortunately, is at risk of falling behind. Part of the reason is the state’s high costs — especially its taxes and workers’ compensation insurance — as well as a government that favors unions over employers seemingly at every turn. That creates a business climate so inhospitable that even state-incentive giveaways can’t seem to overcome it.
In 2021, the General Assembly and Gov. J.B. Pritzker wisely unveiled an incentive program for EV makers. T/CCI, an EV supplier, stepped up to take advantage of it.
After that, nothing.
With no one else taking up their offer, Pritzker and Co. at the end of last year amended the so-called REV Illinois program to provide even sweeter incentives. As he signed the updated measure, Pritzker pitched Illinois as “leading the electric-vehicle revolution” and “the best place in the nation” for EV companies to call home.
The result so far is more nothing.
The state said its pipeline of prospects has increased “significantly” since the expanded incentives went into effect in February. “We expect to announce additional REV agreements in the near future,” the state’s economic development agency said in a statement.
What’s taking so long? Despite its high costs, Illinois enjoys significant advantages over competing states, including an experienced workforce, centralized transportation, a world-class city in Chicago and tremendous brain power at its research hubs and universities.
This page recently celebrated Illinois scientists who made a huge breakthrough in battery technology that promises to increase the range of EVs. Illinois claims to host 1,800 companies making EV parts, and it has a long-standing foundation in the industry through locally based stalwarts like Navistar and BorgWarner.
But it’s also obvious that all is not well in the Illinois car industry, and not just because of a weak incentive program.
Rivian, a high-quality EV maker that resurrected a 2.6 million-square-foot former Mitsubishi plant in downstate Normal, has seen its stock price sink amid doubts that it can compete in a crowded field, although it has pinned many future hopes on selling its impressive electric delivery vehicles to customers like Amazon. Stellantis’ big Belvidere assembly plant outside Rockford is sitting idle, no longer producing gasoline-powered Jeeps, and the company so far has resisted the state’s invitation to retool the plant for assembling EVs.
For decades now, automakers have diversified outside the Midwest in states that lack Illinois’ strengths but instead offer lower costs and a friendlier environment for employers. While Michigan remains No. 1 for auto manufacturing jobs, states like Kentucky, Tennessee, Mississippi and South Carolina have made inroads. It’s a highly competitive landscape.
Yet in many ways, the transition to EVs plays directly to Illinois’ strengths, especially its reservoir of well-trained workers. While car brands in the past were defined by horsepower, handling and other mechanical attributes, today’s EVs compete as much on software as hardware. These quiet new vehicles are in essence computers on wheels that feature selling points like state-of-the-art infotainment, voice controls and self-driving functions.
So, car-making depends increasingly on high-end skills. Illinois has a high-end workforce, and the state is wisely investing in training programs for EV and other clean-energy workers.
When do we see the payoff?
Governor, show this vital, fast-moving industry that our state really is the “best place” for its companies to call home. Get everyone to work landing some signature deals.
