A major win in the recent United Auto Workers (UAW) strike was when GM agreed to include its battery manufacturing workers under the union’s master contract. Propelled in part by this historic victory, thousands of previously non-union autoworkers are now organizing to join the UAW, including those at companies leading in vehicle electrification.

But amidst CEO assertions that building battery electric vehicles (BEVs) involves 30% less effort or a 30% reduction in hours, is there reason for U.S. labor to worry about the EV transition? We think not, for two key reasons. The Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL) are helping automakers to (1) vertically integrate and (2) onshore BEV production by providing billions of dollars of incentives and investment in domestic industry. Recent research suggests this combination will support more auto manufacturing jobs, not less. In addition, growing the EV industry at home will make U.S.-made vehicles more competitive in other regions with strong environmental regulations, and looking at BEV production at the company and industry levels as opposed to the single-vehicle or component-count levels brings a different view.

FEV recently conducted a detailed analysis comparing the assembly requirements of a VW Tiguan, an internal combustion engine vehicle (ICEV), and a VW ID4, a BEV. The study found that the total labor cost (from both VW and its suppliers) for the BEV exceeded that of the ICEV. However, under current manufacturing arrangements at VW, the labor to assemble the most expensive parts unique to the BEV—the battery pack and motor—occurs outside of VW plants because these items are purchased from suppliers. That contrasts sharply with the most expensive ICEV-specific parts—the engine, transmission, and exhaust aftertreatment system—which are mostly built in-house. Given FEV’s estimated total labor requirements for BEV production exceed that of ICEV production, bringing motor, battery module, and battery cell fabrication in-house could lead to higher in-house labor hours to build BEVs than ICEVs.

A comprehensive 2022 study by researchers at Carnegie Mellon that compared the labor demands of manufacturing ICEVs and BEVs reached similar conclusions. With process-based data from automaker shop floors supplemented with public literature, the authors determined that BEV powertrains require more labor hours than ICEVs, primarily due to battery and cell manufacturing.

The question then becomes: Are automakers integrating motor and battery pack and cell manufacturing? Indeed, in their efforts to reduce BEV costs while improving performance and driving range, automakers are vertically integrating by moving battery and motor assembly in-house. Shifting from purchasing these expensive components to making them in-house reduces overall costs. So, although one CEO said “the most important thing” is to reduce labor content, vertical integration of motors and batteries signals more assembly time—and thus more in-house labor—for BEV production.

This also holds true from an industry-level perspective that considers both automakers and their suppliers. A 2021 report by the Economic Policy Institute estimated that increasing the share of domestically produced EV powertrain components to match that of ICEVs today and increasing domestic vehicle production by 10 percentage points could lead to about 150,000 additional auto parts and assembly jobs. The report relied on the single-vehicle perspective to estimate the impact of BEV production on auto assembly jobs and as companies increasingly move toward vertical integration, it may thus underestimate the amount of in-house labor required to assemble a fleet of BEVs.

More broadly, the EV transition necessitates an entirely new and substantial charging network at homes, workplaces, and public locations. That will demand significant labor hours across the country in a variety of industries, including electrical, construction, maintenance, planning and design, and charging infrastructure assembly. There are lots of good reasons to be optimistic about BEV manufacturing and jobs in the United States.

Let’s also recognize that automakers seeking to maximize profit will apply as many labor- and cost-reducing efforts to as many vehicles as possible, whether ICEVs or BEVs. Recent announcements from Ford, Tesla, and Toyota describe reducing manufacturing costs for BEVs through improving worker productivity, reducing factory size and/or complexity, increasing factory flexibility, and reducing assembly steps through vehicle component parts reduction. These improvements also apply to ICEVs, as evidenced by Toyota, Ford, General Motors, and others.

As UAW President Shawn Fain explained, the dichotomy between good jobs and green jobs is “a false choice.” We’re going to need lots of BEVs to quickly and substantially reduce the climate impact of transportation. The EV transition could increase U.S. jobs, and the keys to creating safe, stable, and good-paying jobs are union actions and government incentives and regulations. Smart public policies like the IRA and BIL invest in and expand domestic manufacturing capabilities, and others like greenhouse gas emission standards ensure that advanced vehicle technologies are developed. Together such policies can ensure that the U.S. automotive sector is globally competitive and served by a strong workforce.

Author

Aaron Isenstadt
Senior Researcher

Peter Slowik
Interim U.S. Passenger Vehicles Lead

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INTERNATIONAL COMPETITIVENESS AND THE AUTO INDUSTRY: WHAT’S THE ROLE OF MOTOR VEHICLE EMISSION STANDARDS?

Reviews the political science, regulatory, and economics literature to illuminate the international competitiveness impacts of motor vehicle emission standards.

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Decarbonizing TransportZero-emission vehicles

SectorLight vehicles

PoliciesElectrificationLabor

Technology & ScienceEngineering & manufacturing

RegionUnited States & Canada

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The analysis finds that by 2030, the TCO of battery electric long-haul trucks will likely be lower than that of their diesel counterparts in all representative states considered. Despite their higher upfront price, battery electric trucks have substantially lower operational expenses than the other trucks studied due to their higher energy efficiency and lower maintenance costs. For very high daily mileages, battery electric trucks can still achieve a better total cost of ownership than their diesel counterparts despite the larger battery size required.

The analysis also finds that battery electric trucks have a lower TCO than hydrogen powered trucks for long-haul applications due to lower fuel costs. This is the case even when accounting for tax credits in the Inflation Reduction Act. With estimated charging costs ranging between $0.15/kWh and $0.30/kWh, green hydrogen fuel prices would need to be in the range of $3.00/kg to $6.50/kg for hydrogen fuel-cell trucks to reach TCO parity with battery electric during the next decade. Hydrogen internal combustion engine trucks will require green hydrogen fuel prices as low was $2.00/kg to reach TCO parity with battery electric trucks by 2030.

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Turnaround refers to the time an aircraft is parked between flights, the time between arrival at a gate and the start of its taxi for the next flight. Airlines work hard to minimize turnaround time because parked aircraft generate no revenue; instead, they incur costs in the form of airport parking fees. Ensuring turnaround times equivalent to those of conventional aircraft is necessary to make the economic case for zero-emission planes.

Turnaround varies across airlines and airports but is related to aircraft size. Commuter and regional aircraft can be ready for departure within 30 minutes of parking because of their lower passenger capacities. They typically operate over shorter distances and offer no food service, which eliminates the need to refresh the aircraft’s pantry. Narrow-body aircraft have turnarounds of closer to 45 to 60 minutes, because they need to unload and clean a bigger aircraft and often require pantry reloads. Long-haul wide-body aircraft can require more than 90 minutes to turn around; however, because zero-emission aircraft are not expected to replace long-haul flights by 2035, long-haul zero-emission aircraft are excluded from this analysis.

For commuter and regional aircraft, batteries and hydrogen fuel cells are plausible alternative power sources. ICCT research indicates that a 9-passenger battery aircraft would have an operational range (after deducting the energy reserve required for safe operation) of approximately 280 km using batteries with a pack-level specific energy of 350 Wh/kg (the projected battery technology in 2035). The energy use for such a mission would be around 500 kilowatt-hours. Supplying that energy in 30 minutes would require a 1 megawatt or higher charger. The Combined Charging System (CCS), an electric vehicle charging technology popular in Europe and North America, can deliver up to 350 kW, short of the need for a small electric aircraft. However, chargers of megawatt capacity are being developed through the Megawatt Charging System, a product of the CharIN initiative.

Ongoing ICCT research suggests that a hydrogen fuel cell aircraft using gaseous hydrogen could carry 50 passengers 650 km. This would require around 270 kilograms (kg) of gaseous hydrogen stored at 700 bar. Filling that amount in 30 minutes would require refueling at 9 kg per minute (kg/min) or 240 liters per minute (l/min). As a reference, current roadside hydrogen fueling stations using the SAE J2601 protocol allow a maximum flow rate of 3.6 kg/min. Thus, fuel cell aircraft would require 2.5 times the current refueling speed.

While liquid hydrogen combustion aircraft are expected to enter the market later than fuel cell or battery-electric aircraft, they likely have the greatest emission mitigation potential. A narrow-body aircraft with a hydrogen combustion turbofan engine would use about 5000 kg of liquid hydrogen to carry 165 passengers 3400 km. Filling that amount within 45 minutes would require a refueling speed of 111 kg/min or 1560 l/min. There are no accepted fueling protocols for liquid hydrogen, so no direct comparison to existing technology can be made. However, a flow rate of 1560 l/min is substantially greater than the 900 l/min rate achieved with conventional jet refueling hoses.

Table 1 summarizes the recharging and refueling speeds required for different aircraft types.

Table 1. Recharging and refueling requirements for zero-emission aircraft

A few other concerns bubble to the surface around hydrogen refueling. Safety procedures surrounding hydrogen refueling may prevent other turnaround operations from happening in parallel while the aircraft is refueled. This would increase the turnaround time for the aircraft. Additionally, liquid hydrogen refueling stations would need insulated hoses to keep the hydrogen in liquid form and at cryogenic temperatures. This could result in bigger and heavier hoses, making them difficult to maneuver without machines and automation to do the heavy lifting. Using multiple, smaller hoses could solve this problem and help achieve the faster refueling speeds, but that would displace complications onto the tank design, which would need to accommodate multiple fueling ports.

Since development of megawatt-class charging infrastructure is already underway, the recharging requirement for electric commuter aircraft will likely be met easily. Refueling regional fuel cell aircraft with compressed hydrogen gas will require nearly tripling the existing hydrogen refueling speeds used for road vehicles. However, researchers at the National Renewable Energy Laboratory have demonstrated refueling speeds greater than 13 kg/min, which would be more than sufficient to meet the 30-minute turnaround time requirement. Liquid hydrogen refueling, however, will be a challenge. Without any commercialized solutions, this option first requires investment in research and development of new technology, infrastructure, and standard refueling procedures. Fortunately, liquid hydrogen powered aircraft are unlikely to fly before the end of the decade, so there is time to build the technology.

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Achieving China’s dual ambitions of peak carbon dioxide (CO₂) emissions by 2030 and carbon neutrality by 2060 will require a strong focus on the transport sector and that transport-related air pollutant and CO₂ emissions be monitored and regulated in a coordinated fashion going forward. For the latter, fundamental data about the current baseline and historical trends is needed. This report supports future policies in China by analyzing vehicle air pollutant emissions, CO₂ emissions, and key technologies driving reductions in emissions in passenger cars from 2012 to 2021. The authors collaborated with the Vehicle Emissions Control Center (VECC) in collecting, compiling, cleaning, and validating some of the data used, and the report also assesses how previous policies impacted emissions trends. (To emphasize, the results and findings do not represent any official positions from regulatory bodies in China.)

Several highlights emerge, including:

• Consumer preference has trended toward larger, heavier, and more functionally powerful vehicle segments. The volume of new SUVs increased by fivefold in the past decade, to 9.4 million new vehicles registered in 2021. The share of SUVs among all classes of passenger cars grew from 12% in 2012 to over 45% in 2021.
• The certified CO₂ emission rate of the entire new passenger car fleet, normalized to the New European Driving Cycle (NEDC), decreased by 18% from 2012 to 2021, to 129 g/km, and there was an average annual reduction of 2.2%. The most rapid single-year reduction, 9%, was from 2020 to 2021 as a result of the dramatic increase in the share of new energy vehicles. When solely looking at internal combustion engine vehicles, the reduction in CO₂ emission intensity is less remarkable.
• The adoption of CO₂ emission control technologies increased to varying extents. The portion of internal combustion engine passenger cars equipped with a turbocharger or a supercharger grew from 11% in 2012 to 62% in 2021. Gasoline direct injection (GDI) has become the dominant fuel supply technology of gasoline cars, increasing from 8% in 2012 to 60% in 2021.
• There has been significant progress in controlling air pollutant emissions in the past decade and it is due to the constantly evolving regulatory standards and the penetration of advanced emission control technologies. The laboratory emission intensities of nitrogen oxides (NO_x) declined by over 30% and particulate matter declined by over 70% in the past decade. The average on-road NO_x emission level of passenger cars certified to the China 6 standard is currently in compliance with both China 6a and 6b regulatory requirements.

Figure. Vehicle performance and CO₂ emission rates normalized to 2012 levels (2012 = 100%)

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为实现中国在2030年前二氧化碳排放达到峰值，在2060年前实现碳中和的目标，必须关注交通领域减排，在交通领域的碳减排和空气污染物减排上实现深度协同。为此，相关排放的当前基线水平与历史趋势水平等基础数据的支持将必不可少。本报告分析了2012年至2021年中国新增乘用车的大气污染物排放、二氧化碳排放，以及减排关键技术应用情况的历史数据，评估了历史政策对排放趋势产生了哪些影响，为中国未来的乘用车减排政策制定提供支持。国际清洁交通委员会与中国环境科学院研究院机动车排污监控中心进行合作，进行了数据收集、汇编、清理和检验的工作。需要指出，本报告中任何分析结果和结论并不代表中国相关管理机构的官方立场。

报告列举了一些主要发现，包括：

• 在过去十年间，市场对更大、更重、功能更强的汽车的偏好逐渐显著。SUV的销量增长了五倍，在2021年的注册量达到940万辆，其在所有乘用车中的市场占比也从2012年的12%增长到2021年的45%以上。
• 乘用车新车车队的实验室测试认证二氧化碳排放率（克/公里，转换为NEDC工况值）自2012年以来下降了18%，在2021年时达到129克/公里，年均下降约2%。得益于新能源汽车份额的大幅增长，2020年至2021年二氧化碳实现了十年间最大的年度降幅（9%）。但是，仅考虑内燃机车辆时，二氧化碳排放率在近些年的下降速度明显偏缓。
• 采用二氧化碳排放控制技术的车辆逐渐增加。配备涡轮增压或机械增压器的内燃机乘用车比 例从2012年的11%增长到2021年的62%。汽油直喷也成为汽油车的主要燃料供应技术，其占有率从2012年的8%增长到2021年的60%。变速器类型方面，自动变速成为主流技术，无级变速在内燃机车队中的份额在十年间从5%提高到27%。
• 在空气污染物排放控制上，过去十年也取得了显著进展——这归功于法规标准的不断完善和先进排放控制技术的普及。过去十年间，氮氧化物（NOx）的实验室排放强度下降了超过30％，颗粒物（PM）排放下降了70％以上。经过国六标准认证的的乘用车的车队平均实际道路NOx排放水平已经达到国六第一阶段和第二阶段标准的要求。

乘用车部分物理参数及二氧化碳排放率变化趋势（以2012年水平为100%基准线）

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Allow us then to suggest another case where patents should be set aside, where the direct beneficiaries are in developing countries and the stakes are also high, if measured on a longer time scale: Honeywell and Chemours patents on R1234yf refrigerant. This product radically reduces the climate impacts of air conditioning, but it’s not being used much in motor vehicles in India or in other large (China) or emerging (Southeast Asia) auto markets because of licensing costs imposed by those patents.

R1234yf is a hydrofluorocarbon with a global warming potential (GWP) of 1, compared to a GWP of 1,300 for R134a, the refrigerant common in India’s vehicles today. Back-of-the-envelope calculations suggest India’s mobile air conditioning (MAC) sector could eliminate around 0.4 million tonnes of CO₂ equivalent each year by switching to R1234yf. (We get this by considering 3 million new passenger cars, the 1,300 GWP of R134a, and 0.1 kilograms, the average amount of refrigerant leaked into the atmosphere each year.) This would help to avoid up to 0.5 °C of global temperature rise by the year 2100 while continuing to protect the ozone layer. But using R1234yf in a vehicle in India costs nearly 10 times more than using R134a, and in a market where the average car retails for less than US$10,000, this is unlikely to happen soon without relief on the cost of the refrigerant, some regulations incentivizing its use, or some combination of the two.

The first applications for patents on R1234yf were filed in late 2002, and a patent typically gives the owner the right to stop others from manufacturing or selling the product for 20 years from the filing date. Indeed, even if local manufacturers in India produce R1234yf refrigerant using their own unique process, a significant challenge for Indian manufacturers right now is Honeywell’s application patent, which restricts them from using R1234yf in MAC systems unless they purchase a license. Thus, Indian manufacturers can’t utilize R1234yf without risk of significantly increasing the upfront cost of their vehicles.

Although vehicles sold in the United States, the European Union, and Japan have all mostly shifted to R1234yf, these are less price sensitive markets than India and regulations either required the change and/or incentivized the switch. India can support climate-friendly refrigerants with changes to its vehicle regulations, and we’ll publish a paper that explores some of the most advantageous ways to do that soon. But there’s more to this than local changes, because most patents on R1234yf have already been invalidated in Europe following lengthy legal battles. Even still, Honeywell continues to maintain similar patents in India on a broad range of percentage mix of R1234yf, with claims varying from 5% to 99% by weight.

We said above that patents are typically granted for 20 years, and 20 years from 2002 is 2022, so just this year. Won’t time take care of this? Unfortunately not. Recent work from the Institute for Governance & Sustainable Development reviewed R1234yf patents in various regions and showed that some in China aren’t expected to expire until 2030. In India, some are expected to last to 2033. There are even applications for patents that would last longer than that.

What about the Kigali Amendment to the Montreal Protocol, which India signed? Well, pursuant to that India has to freeze the production and consumption of R134a in 2028; use in that year becomes the baseline and then phase-down of use needs to begin 5 years later. China has to begin phasing down earlier than that, in 2024, and is already dealing with patent-related court actions, including one at the end of last year by Honeywell.

R1234yf is an all-around great product. Not only does it have very low GWP, it’s also cost-effective in reducing CO₂ emissions during real-world driving. However, as shown in the figure below, its cost to vehicle manufacturers, after including the current license fee, is higher than the technologies that qualify for off-cycle credits in India’s fuel consumption standards. India’s regulations can adjust to capture the many benefits of R1234yf, but the high retail cost for the car that would result would still be an obstacle to customers.

Figure 1. Direct manufacturing cost comparison of R1234yf with technologies that qualify for off-cycle credits in India’s passenger car fuel consumption regulation.

A high retail cost also creates risk at the time of maintenance and servicing of MAC systems. As R1234yf is a drop-in replacement for R134a, even if it were used by the manufacturer for the first charge, a continued high retail cost for R1234yf might deter customers from recharging with it. They might instead refill with R134a, with all the climate impacts that would entail.  It’s important because a customer refills four to five times during the lifetime of the vehicle.

While the cost of R1234yf remains high, it will likely be used only on premium vehicle models in India. The process of challenging the patents has not yet started in India, but does it have to? What if the legal barriers to the use of R1234yf were removed by granting a free license? In that case, India and the world could soon benefit from a more rapid transition to low-GWP MAC refrigerants.

Like a lot of corporations, Honeywell and Chemours have environmental and sustainability goals with a lot of fine words. Here’s a chance to directly and immediately match fine words with real action. Changing course and giving up the patents would mean Honeywell and Chemours would make less profit from just one of their many business lines around the world, that’s true. But they’ve enjoyed years of premium prices already, and less profit doesn’t necessarily mean zero profit. It might just mean less.

The aforementioned COVID-19 vaccine patent waiver is a positive step forward and can set a precedent for strategies to tackle the global issue of climate change. Keeping the price of R1234yf refrigerant high is speeding up a global warming process that so many are working so hard and sacrificing so much to mitigate. Isn’t it worth the price to these huge companies, after years of enjoying the fruits of patent exclusivity? Better still, waiving the patent on R1234yf would help make the planet more liveable for all.

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