Wisconsin’s status as a powerhouse state in the automotive industry could make the state a global hotspot for electric vehicle (EV) production, according to a report for the Wisconsin Economic Development Corporation (WEDC).
Prepared by nonprofit research institute SRI International, the report states Wisconsin is “home to a large and diverse automotive sector comprising firms that supply raw materials for the automotive industry, manufacturers that produce automobile parts and original equipment manufacturers that assemble these parts into complete vehicles.”
Wisconsin’s automotive manufacturing sector employs more than 92,000 workers across the state, SRI International noted.
Manufacturing also played a heavy hand in forming Wisconsin’s real GDP, with 57.95% coming from the sector in 2021 — more than any other economic sector, according to data from the U.S. Bureau of Economic Analysis.
Furthermore, Wisconsin Public Radio reported the state registered 13,893 electric vehicles last year, an increase of 53% from 2021.
With global demands for EVs growing due to oil shortages, firms in Wisconsin’s automotive industry may face some disruption unless they further transition from internal combustion engine (ICE) to EV supply chains, according to the report.
While the state could become an EV hub due to its presence in the vehicle manufacturing industry, the report identified broader challenges that must be addressed to recognize this goal.
The first challenge the report identified was low manufacturing productivity, which researchers found decreased Wisconsin’s competitiveness in national and global markets. According to the WEDC report, Wisconsin’s below-average productivity in this sector stems from an overreliance on labor compared to automated machinery as a production input.
“There is a serious need for investments in automation and for other forms of process innovation that raise the productivity of Wisconsin’s manufacturers,” the report read.
Wisconsin is reduced vulnerability to disruptions caused by the global transition to electric vehicles, as manufacturing already produces components for both ICE and electric vehicle products, according to the report. However, the report also found Wisconsin’s overreliance on labor threatens its future competitiveness in the global market.
Another “chronic issue” is the shortage of skilled workers in Wisconsin’s manufacturing, according to the report. An aging workforce, a negative perception of manufacturing work and slow labor force and population growth are noted as causes of this shortage.
“Increasing the supply of skilled labor by scaling up technical training should be considered a priority over the short-to-medium term,” the report said.
Researchers also advised Wisconsin’s manufacturing leaders to adopt more training initiatives to align with the state’s long-term strategy of preparing workers to use the “most up to date processes and technologies.”
“For Wisconsin to develop a thriving and dynamic EV manufacturing cluster, the state will need to mobilize its immense base of assets and coordinate its activities and investments in a way that produces sustainable growth conditions for the industry,” SRI International wrote in the report.