Is the EV Revolution the Next People Analytics Revolution?

On July 18th this year I did something that as someone deeply trenched in analysis and risk mitigation is completely out of character.?The moment Chevrolet made the pre-order available for the new Blazer SS EV, I plunked down my down payment to get a place in line. If things stay on schedule, a 557hp radiant red EV SS will replace my loved but unreliable Jaguar XJ and join the garage with our 1990 Camaro RS, 1991 Blazer K5 and Jeep(s).?I’ve never paid to be in line. I know the first model year blues all too well.?As much as I know this purchase is emotional, I found a great part of that emotion is stepping into “what is next”, not just that it’s a gorgeous fast vehicle. ??

From a People Analytics perspective, I believe what is next is nothing short of transformational across many industries.?

There won’t be a switch flicked. There won’t be a decree of “now we are all electric”.?Gas powered cars will roam the roads for generations to come. Ask any muscle or classic car owner and you’ll know they would dig for oil with a spoon before giving up the sound of that engine turning over.?We’ll be living in a blended environment for the rest of our lifetimes, which makes it fascinating to theorize the effects on the workforces in these industries.

The automotive industry makes up approximately 3% of the GDP or ~627 billion dollars annually (bea.gov).?After remaining somewhat flat from 2018 to 2020, electric vehicle sales nearly doubled in 2021 from ~300K to ~600K with EV sales making up approximately 75% of that total (the remainder being plug-in hybrid vehicles) (energy.gov).?For passenger (light-duty) vehicles, that total is ~ 3% of total vehicle sales in the US and 7% worldwide for 2021 (evadoption.com). This growth, plus an aspirational goal by the federal government of 50% of vehicles being sold in the US being electric by 2030 will significantly reshape the landscape of automotive manufacturers, suppliers, servicers and fuel stations.?

Manufacturers

???????????????A federal think tank put together in 2021 (epi.org/publication/ev-policy-workers) found that the automotive industry could lose upwards of 75,000 jobs by 2030 if no formal guidance was put into place to aid in the transition from gas to electric vehicles.?

???????????????The general recommended plan (greatly generalized!) is three-fold.?It’s no surprise to anyone owning an electric lawnmower or snowblower, electric machines have many less parts than do their gas-powered counterparts.?It’s estimated that this gap results in a 30% savings in labor to assemble an electric vehicle over one that’s gas-powered of a similar class. To combat the increase in efficiency resulting in a loss of labor, the report suggests that effort and funding be put into establishing domestic sources instead of foreign.?By pulling the source of materials into the US, or better yet for manufacturers directly into their plants, the challenges of supply chain issues are better controlled as well as that of cost and intellectual property.?That comes at a price; as US Labor is materially more expensive than overseas labor, but the recent pandemic showed that risk mitigation and centralization play a part in any sourcing decisions.?

???????????????Second, the auto industry has always been resilient in re-skilling.?This will put a focus on People Analytics professionals to understand the workforce of the future and the skills needed to address those needs and transition employees to that place.?As with any consequential transition, there will be those that don’t want to make the leap and will exit; but with that there will be those working in other industries who see the excitement and potential.

???????????????Third is to sell more EV’s than foreign competitors.?While most manufacturers are eclipsing the tax credit threshold in sales, this objective isn’t as farfetched as one may believe, as the US has some decided advantages in the EV market.?Europe has always invested a significant amount into diesel technologies and has only recently started to transition their brands to EV.?Japan has fewer offerings than US based companies in EV, and companies such as Honda have invested significantly in hydrogen, resulting in fewer EV choices in their fleets.?South Korean companies are out of the gate, but not ahead of the US. In my opinion, the EV gives American manufacturers not only the opportunity to do more than significantly increase market share. I believe this could be the largest reset for US Manufacturers since the first Tin Lizzie rolled off the line. ??This is an opportunity to make consumers genuinely excited about cars again.?The study ventured that if these three steps were executed effectively the 75,000-job deficit could be turned into a 150,000-job gain.?An exciting new world for those of us in People Analytics. Which brings us to “how do we sell them” ….

Dealership Models

???????????????An automobile is transportation that gets you from point A to point B. In America, YOUR automobile is a rolling representation of who you are.?Harley-Davidson, a company steeped in vehicles representing their customers learned quickly that their dealerships couldn’t sell the electrified Livewire.?The customers, sales personnel and owners at existing dealerships were quick to dismiss the bike, resulting in it being spun off as its own brand. Most customers at an HD dealership just didn’t see the bike representing who they were, and unfortunately neither did the dealerships. Dealerships for EV’s in the automotive industry don’t have that challenge.?There is enthusiasm, or at least curiosity about EV’s with almost every customer that walks into the real or virtual showroom.?And the sales pitch is becoming easier.?The more EV’s look, feel, and drive like cars we’re familiar with, the easier the transition will be.?When I see models like the F150 Lightning, Chevy Blazer EV and Equinox EV I see cars, not electric cars.?EV’s are no longer for the leading-edge pioneers and there’s a good percentage of the population that for all its tech-wizardry, turns their noses up at the “bar of soap” styling of Tesla’s.?When we look at people analytics in a dealership network, I don’t see the necessity for a significant disruption to the sales approach outside of the natural migration towards customers doing more online research. However, as Ford has toyed with, this may be an opportunity for manufacturers to pull the network in. Why would manufacturers pull in the sales model from private dealerships? ?One primary reason – service revenue. On average, a dealership makes ~40% of its revenue from service.?In a world where there are 30% fewer parts, and those parts aren’t moving, or need fluids…. that revenue diminishes quickly.?Add in that GM is using its Ultium platform across most brands and many vehicles which results in many of those parts being interchangeable.?There is little applicable cross-knowledge between a combustion engine and a battery platform, so dealerships are left at best with one staff dedicated to battery and one staff to electric.?Manufacturers could provide a blended model where they hire and provide EV qualified service personnel/mechanics or move to take over dealerships completely to control the transition of the model.?In either of those cases, the workforce planning and analytics would be an incredible lift.?Even if the dealership model stays unchanged, manufacturers have the accountability to provide an environment for personnel to become trained on the new platforms and help those partners hire in personnel with the right type of background.

Refueling

A downstream effect that I haven’t seen many articles on has been the future impact on the refueling industry.?Due to regulations, safety, logistics and convenience the “gas station” has become a staple of American roadsides.?How does this affect anything in People Analytics and Workforce Planning??There is the obvious new need for installation and maintenance of the charging stations being implemented by every manufacturer and third party.?There is the opportunity for manufacturers to build out a network of implementors to get THEIR station into a customer’s garage.?There is also an opportunity for companies NOT currently in the transportation industry to think about the customer experience and if they can somehow now become a value-add service.?Charging stations won’t likely supplant gas pumps anytime soon, and most gas stations have little or any room for expansion, even on interstates. Most cars (for now) take anywhere from 20-45 minutes on a fast charge to go from low to full charge.?That’s MUCH longer than the 3-5 minutes it takes to completely fill a gas tank. So Lowe’s, Target, Walmart……. what would possibly drive customers into your stores versus your competitors? How about banks of charging stations in lots that generally have more than enough room for them? If I’m grocery shopping for 30-45 minutes, why not just charge the car at the same time? Granted this isn’t cut and dry People Analytics or Workforce Planning, but what I’m looking to emphasize this transformation can be an opportunity if we rethink our value propositions.

There are many, many more implications of this transition, and I’ve taken a very broad brush to only a few of them.?But if you’ve made it this far, you share a passion for transportation and people analytics, which is a weird combo-platter, so I’d love to connect!

#peopleanalytics, #auto #workforceplanning #analytics #tableau #visier #ev #electriccars #visier #workday #workforce ??