The Expert Podcast

So we've talked before about what has to happen for electric vehicles to become ubiquitous in the U.S. market — to become the majority of vehicles on the road and to have consumers transition to these vehicles. Right now, electric vehicles amount to about one percent of the cars on the road, although last year two or three percent of new cars sold were electric vehicles. So it's kind of a step in the right direction, but it's certainly not a huge volume. And part of what we've talked about before has had to do with usability and adoption by consumers and demand by consumers.

But there's another side of the equation — there's another obstacle to overcome — and that comes from the supply side. Here's an example: Volkswagen is one of the largest proponents of electric vehicles as a major manufacturer other than Tesla. Volkswagen is committed to electric vehicles, and they have more of their model line going to electric than many other manufacturers. And their U.S. chief, their general manager of U.S. operations, has some concerns about — even if consumers do want electric vehicles — how are they going to produce them?

Let's take a look at what the concerns are, according to their top executive. Obviously, battery production is a big part of it, right? We've talked about that before — is it possible to build all these batteries? And a lot of the obstacle to building them has to be the factories. There's no factories to build these batteries yet. According to this executive, it's the biggest industrial transformation in America. That's a big deal — bigger than the Industrial Revolution, other conversions to manufacturing. And Volkswagen and other manufacturers are committing tens of billions of dollars for assembly plants throughout North America.

So you might just think, well just throw money on it, build the plants, and we'll be fine, right? Maybe not. Let's see why. They're talking about a new series of challenges, including attracting enough labor. This is a problem — the labor force has deteriorated or evolved, however you want to look at it, to more of a service economy. People working in service industries, not in manufacturing.

Why is that different? It's a different cultural or philosophical point of view. We'll talk about that in a minute. There are some other problems too — getting the minerals and supply chains and the health care and that kind of thing. But what are the philosophical differences for workers in the service versus manufacturing industry? Well, here's the quote — and it might sound kind of harsh — but you tell us, is it true? Put in the comments — do you think this is a true statement?

"We need to build a collective ecosystem that turns America into a manufacturing society again. I think Americans have become a service economy. The challenge is getting somebody who's been working at Starbucks, taking 20-minute breaks, smoking cigarettes out back, and jumping into a factory — it's a whole new world. Long shifts for factory workers are much different. This is brutal, difficult, challenging work."

What do you think about that? Is it harsh? Is it mean? Is it true? Well, it's a serious enough problem where this executive says this is a scale of investment that makes the Industrial Revolution look like a cakewalk. That's a pretty significant statement to make.

We're seeing this on the general contractor construction side — there's no laborers, there's no people that have skills to do framing, electrical, plumbing. And even if they may have the skills, or they don't need the skills — there are some things that don't need really deep skills. You can teach somebody framing, basic sheetrock, other kind of day labor type projects. But there's not a lot of people that want to do them, even if you don't need the skills.

How is that going to translate to changing our economy from service to manufacturing? If we want to have these electric vehicles, we need the batteries for them. That's the whole — the vehicle is a battery. It's not an engine, transmission, internally lubricated parts, internal combustion engines — it's all battery. That's it. If we need to construct these vehicles, somebody's got to make batteries. It's got to be made in the U.S., really.

There's not enough excess capacity overseas to build enough batteries to do this. And in reality, you really don't want that, because it's going to hurt the supply chain. We're already seeing the ships piled up at the ports — both coasts — L.A., Newark, Savannah, Georgia, Jacksonville, Florida. Even the Gulf ports are backed up. So you want to build these here — assuming you can get the raw materials, assuming you can have the factories built — are there workers who are going to do this? How much can be done by robotics, automation? Or do you need actual hands-on workers?

The chief executive at Volkswagen seems to think it's a big problem. Didn't see anything in that article about a solution. How do you change the mindset of workers to want to do this? Or should we even be bothering to try? Should people be forced to work in factories? Should people be forced to have that kind of manual exertion labor? And then should that be a requirement for an income?

What do you think? What are your thoughts on the general labor economy and where it's going? On the other hand, if people don't have these kind of jobs that are high paying, who's going to buy these cars? Who's going to be able to afford an electric vehicle? And where's the market going to come from?

And we don't know yet if these vehicles are going to last longer or shorter than internal combustion vehicles. Is their lifespan going to be shorter? Is it going to be more of a rotation? And if there's fewer moving parts — engines, transmissions — why are they more expensive? And are they going to get less expensive?

In theory, an internal combustion engine should be more expensive than a battery. But so far, EVs — electric vehicles — cost more money than gasoline vehicles, ICE vehicles as they're called.

What do you think? Would you work in a factory? Do you think there's enough labor to staff these manufacturing plants? It would be great for the U.S. to be a manufacturing hub again. It would be good for the economy. Or would it? Are we better off being a service economy and maybe selling batteries to other countries if we manufacture them?

This is a big obstacle — not counting the other obstacles. Do people want them? Is there enough electricity to charge them? Is there enough power plants to drive the grid to do this? Those are other problems not even mentioned in this. This is all about the labor — and some about the raw materials that go into the batteries too — cobalt and the other things.

Let us know what you think. We'll see you on the next video.