Energizing an Ecosystem: The Electric Mobility Revolution in Southern California LOS ANGELES COUNTY ECONOMIC DEVELOPMENT CORPORATION Collectively Advancing Opportunity and Prosperity for All Report Sponsors This report was commissioned by a partnership of Southern California Edison, the Southern California Association of Governments, the Los Angeles County Metropolitan Transportation Authority, the City of Los Angeles Department of Water and Power, and the South Coast Air Quality Management District. Electric Vehicle Report 2 Institute for Applied Economics The LAEDC Institute for Applied Economics o ers objective economic and policy research for public agencies and private firms; focusing on economic impact studies, regional industry analyses, economic forecasts and issue studies, particularly in water, transportation, infrastructure and environmental policy. Collectively Advancing Opportunity and Prosperity for All Electric Vehicle Report 3 Electric Vehicle Report 4 TABLE OF CONTENTS Executive Summary 6 1. Introduction 9 2. On the Map: A Landscape Analysis of California’s Electric Vehicle Industry 14 3. EV Deployment in Southern California 29 4. Regional Workforce Analysis 35 5. Employment Transformation & Policy Proposals 45 6. Final Thoughts 51 Electric Vehicle Report 5 Executive Summary 50 years ago, Los Angeles was on the heels of pointed to California’s rigorous clean air standards Detroit in a close competition for the esteemed as a main hindrance to manufacturers. In a perhaps title of the nation’s automotive capital. However, ironic twist, the state’s commitments to combating as the cost of production fell in other states and climate change might have aided California in once overseas, auto manufacturers one by one began again finding its footing as a frontrunner in the abandoning the Golden State, and the final closure nation’s auto industry. The Golden State’s climate of General Motor’s Van Nuys Assembly plant in goals, government support, and growing resource 1992 led many to believe that L.A.’s auto glory days network are now propelling new auto leaders that were over. One telling article from the Los Angeles find themselves facing the global demand for more Times in 1991 encapsulated the general sentiment, efficient vehicles. reporting that the booming industry was, in fact, The closure of auto plants in the 80s and 90s 1 “now a memory.” Over the years, many have did little to dampen the Californian fixation on automobile consumption. This extensive market of drivers coupled with the growing demand for clean transportation has provided a vital incentive for manufacturers to make their way back into the state. In the years since the LA Times article, over 60 company headquarters related to the electric vehicle (EV) and charging industry and over 20 manufacturing sites have made California their home. Emerging EV producers have found in the Golden State an eager audience, ready to test, purchase and support the latest electric mobility developments. Exhibit ES-1: Electric Vehicle Cluster Goods Producing Services Producing Electrical Equipment Mfg. Merchant Wholesalers Electric Power Generation Customer Service & Transmission & Management Transit & Ground Motor Mfg. Passenger Transport Transport Equipment Mfg. Insurance & Brokerages Software Publishing Motor Vehicle & Parts Dealers 1 Baker, Bob. “L.A.’s Booming Auto industry Now a Memory”. 20 July 1991. The Los Angeles Times. https://www.latimes.com/archives/la-xpm-1991-07-20-mn-2136-story.html Electric Vehicle Report 6 From start-ups to industry giants, California and Industry clustering is also supporting the greater L.A. region have provided and nurtured geographically concentrated growth in jobs, a new automotive ecosystem. This time, however, innovation, and commerce, as suppliers and the system is poised to meet some the nation’s related businesses locate nearby. For example, leading climate objectives and ultimately lead the the deployment of charging infrastructure will state to accomplish the California Air Resources be an essential driver of new employment, as a Board’s (CARB) strategy of 100 percent zero significant number of workers will be employed in emission vehicle (ZEVs) sales as a proportion of activities related to these charging networks, such automobile sales by 2050.2 as installing and maintaining EV infrastructure. In Southern California alone, over 11,000 public For purposes of this report, the Los Angeles charging outlets have been installed, with County Economic Development Corporation hundreds more currently being planned, financed, (LAEDC) defines electric vehicles as battery and installed to meet the state’s goal of 250,000 electric vehicles (BEVs, interchangeably referred stations by 2025.3 to as EVs), plug in hybrid electric vehicles (PHEVs) Expanding the EV industry and fuel cell electric vehicles (FCEVs) based continues to create new opportunities, employing upon the state of California’s current policies 119,200 workers in the Southern California region. and definition of electric vehicles. This report Accounting for the business and employment will focus primarily on three essential industries environment of the EV cluster in California, combined in the EV cluster: electric passenger vehicles; with state and local goals for EVs as part of the battle electric trucks, trams and buses; and charging and against climate change, development of new laws, alternative fuel networks. regulations, incentives and structures are essential Given the state, national and global interest in electric for this cluster’s long-term success. Legislative action vehicles, it is no surprise then that the Golden State at the local, state and federal levels will be required already hosts a robust, if nascent, electric vehicle in some instances, while business, government and cluster. Indeed, the electric vehicle industry has education will have to combine their resources and provided thousands of well-paying job opportunities energies in existing and new convening bodies to and $9.6 billion in labor income. In 2018 alone, the align priorities and strategies. Working in tandem, EV EV industry provided 275,600 jobs across a variety business leaders and policymakers can work to make of sectors with average annual wages of $91,300 California the global center of the research, design, and $80,900 in the state and the Southern California manufacturing and sale of electric vehicles. region, respectively. The growing EV cluster is heavily concentrated in the Downtown Los Angeles (DTLA), Exhibit ES-2 South Bay, and Orange County areas and with the EV Industry in Southern California, 2018 many EV technology and software companies in the Employment 119,200 Bay Area. The five counties of Southern California (Los Angeles, Orange, Riverside, San Bernardino Total Charging Stations 2,427 and Ventura) account for 43.4 percent of EV jobs in Total Registered Electric Vehicles 200,400 the state. Source: CA DMV, U.S. Dept. of Energy; Estimates by LAEDC 2 “Mobile Source Strategy.” California Air Resources Board. May 2016. Pg. 36. 3 “Zero-Emission Vehicles.” 2020. California Public Utilities Commission. https://www.cpuc.ca.gov/zev/. Electric Vehicle Report 7 1. INTRODUCTION “California has emerged as the nation’s EV industry frontrunner.” Electric Vehicle Report 8 1. Introduction As electrification changes the landscape of are eager to switch to EVs and adoption is making transportation globally, California leads the nation its way towards Southern California Edison’s (SCE) in design, manufacturing, and adoption of electric ambition of reaching 7.5 million EVs on the road vehicles. As ACCESS Magazine stated in 1993, “the by 2030, which SCE believes necessary to achieve economic and human resources for an electric-car California’s climate goals. 4 industry are already in place in Southern California.” According to California’s registration data, 2018 In the 25 years since this observation, California has marked the first year in which pure battery electric emerged as the nation’s EV industry frontrunner. vehicle (BEVs) registrations surpassed that of plug-in Home to nearly half of the nation’s electric cars; hybrid electric cars (PHEVs), resulting in over 22,000 24 percent of the nation’s charging stations; the more BEVs than PHEVs on California’s roads. This is most electric vehicle incentives in the United States; a market signal that California consumers view pure and the nation’s largest vehicle market, California’s battery electric vehicles favorably, particularly in the influence in the future of the automotive and Bay and Southern California areas. transportation industry is undeniable. ZEVs are also contributing to a large and growing Innovative companies such as Tesla, Canoo, Fisker share of California’s exports. In 2019, transportation Inc., Hyperion Motors, and Ampere Motors began equipment exports – which includes motor vehicle their journey in California. Inspired by the Golden manufacturing as a subcategory – accounted for State’s rich automotive history and forward-looking 13 percent, or $22.7 billion, of the state’s global environmental policies, these companies drive the exports in 2019. Moreover, these exports grew 18 future of electric vehicles. percent from 2018.6 California’s EV Market California already accounts for nearly half of EV Exhibit 1-1: Share of United States sales in the United States and is spearheading new Electric Vehicle Population tranportation policies that transcend the rest of the nation’s standards. Currently, state goals set by former Governor