Can Detroit lead the green mobility revolution?


Over the past two years, businesses as well as state and regional policy makers have become familiar with a veritable alphabet soup of federal programs. Otherwise for Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Coronavirus Relief & Response Supplemental Appropriation (CRSSA), and US Rescue Plan (ARP), corporate America and state and local governments would be buried under an avalanche of deficits and layoffs.

As 2021 draws to a close and the pandemic continues, this wave of federal funding has shifted to its next phase – reconstruction. If Michigan plays its cards right, it can decipher the alphabet soup and rearrange the letters in the script for a completely transformed economic future that builds on its historical and current strengths in advanced manufacturing and mobility. Detroit put the world on wheels and revolutionized transportation over 100 years ago, and now is our chance to reignite the revolution and move the world; but this time without carbon.

This objective is ambitious, but absolutely necessary and entirely achievable. In fact, it will happen, the only question is where? When we look to the 21st century, will we regret seeing the days when Detroit ceded its place as the center of global mobility to California, Arizona, Texas or China, or will we celebrate the when we leveraged our existing advantages and took the lead to start outpacing the competition while saving the planet?

Rising temperatures have caused devastating weather across the world with increasing frequency. In 2021, Germany, India and China suffered the worst flooding in generations, killing thousands, while Africa, South America and parts of Asia suffered from extreme drought, putting millions of people at risk of starvation.

And we are not safe here at home. This summer alone, the American West scorched and scorched in a record-breaking heatwave that brought wildfires and droughts. Meanwhile, our part of the country went through historic floods that submerged New York’s subways and tens of thousands of basements in Metro Detroit.

As a result, the world has finally woken up to the need to reduce our carbon footprint and slow the impact on our planet. In the United States, transport (cars, trucks, planes) represents almost a third of total greenhouse gas emissions; largest source by sector. The Biden administration recently announced a goal for more than half of all cars sold in the United States to be electric – meaning zero tailpipe emissions – by 2030. Other parts of the world have made more ambitious plans. This means that over the next decade automakers will build and sell hundreds of millions of electric vehicles.

Surely that means Detroit, with its huge lead in facilities and R&D, will be the center of the future for electric vehicles, right? Not necessarily. For starters, the Big Three were only a fraction of the 3.1 million global electric vehicle sales in 2020. Granted, they were late in the game, and their first real consumer products are just arriving in dealerships. But even when the Big Three’s electric vehicle market share grows, as it surely will, there remains the real question of where they will build them. Will they retrofit existing factories for the different and more flexible requirements of electric vehicle manufacturing, or will they choose greenfield sites to build from a clean slate? Much of this decision will depend on where the cells, modules and battery packs are produced and assembled.

This is a huge risk for Michigan. While the internal combustion vehicle supply chain was concentrated in the upper Midwest near Detroit for most of the 20th century before beginning to expand southeast and across the Mexican border, the supply chain supply of electric vehicles is nascent. Michigan has some existing capacity, and both Ford and General Motors have announced plans to build batteries in Michigan and northeast Ohio, but the vast majority of batteries used in electric vehicles are currently being manufactured. abroad. And Ford’s recent announcements about building mega-factories in Kentucky and Tennessee should be a wake-up call for the state.

Following: Ford bets on electric vehicles with massive multi-billion dollar investment

Following: Can electric vehicles handle flash floods, high water? I tried.

As the Big Three catch up and invest the tens of billions of dollars they have committed over the next decade, the fate of Michigan hangs in the balance. If those investments are made here, we will retain our place at the top of the world ranking of mobility. Otherwise… You know the rest of the story.

Fortunately, at this critical point in our economic journey, we are not being left behind as spectators. The alphabet soup of federal programs came at exactly the right time. The enactment of the US bailout along with the likely passage of bipartisan innovation and infrastructure bills and a broader reconciliation bill, yet to be determined, mean that unprecedented levels of investment federal government will go towards economic restructuring, climate solutions and inclusive entrepreneurship and workforce development.

While the federal government invests, it is up to Detroit and Michigan to design and deliver transformative investments and initiatives.

To achieve this, the following three actions are urgent:

First, the city, the metro and the state (public, private and civic leaders) must organize themselves to succeed. Federal government investments will flow through literally hundreds of programs in dozens of agencies. A process that simply adds up the wish lists of credible but disparate organizations will lead to results that don’t measure up. The whole will be less than the sum of the parts. On the other hand, a coordinated strategy to increase our competitiveness in manufacturing and advanced mobility, to restore our downtown as a globally significant innovation hub, to improve equitable access opportunities and replacing industrial age infrastructure with sustainable and resilient systems will reposition the region for the next century. Cities like Dayton and Louisville are already establishing stimulus command centers to align federal sources with local priorities, track progress in obtaining a wide range of federal funds, and monitor the timely and effective execution of projects. . It is imperative that Detroit align its efforts to access these resources with a single goal. We should plant our flag in the ground and announce that the future of global mobility — one that doesn’t destroy the planet — is going to be built here, and we should focus our efforts on accessing federal resources to support that vision.

Second, certain federal programs merit immediate attention as part of this overall strategy, given their relevance to Detroit’s economic future. Detroit must start making plans NOW to compete for federal investments in technology centers, R&D commercialization and electric vehicle charging stations. Businesses and community colleges should start planning NOW to equip workers with the skills they need for new jobs in the clean economy. Financial institutions, entrepreneur support groups, governments and investors should come together NOW to launch new funds and products, quality capital and business coaching, especially around start-up and scale-up. scale of Black and Maroon-owned businesses. The Detroit Regional Partnership (DRP) supported an effort to submit a response to the Economic Development Administration’s $1 billion Build Back Better regional challenge, which is a big step toward that vision. We need to coordinate our plans for the State’s Small Business Credit Initiative and the Good Jobs Challenge to complement this effort.

Finally, Detroit and Michigan should consider creating a multi-sector, special-purpose intermediary with the capital, capacity, and community reputation to lead the climate transition. Helsinki’s 5-year Smart and Clean Foundation provides an example of how public, private and civic leaders can support an organization to identify the multiple efforts that need to be undertaken to secure a green future. disentangle the disparate responsibilities of different sectors. It may be the DRP or the Michigan Economic Development Agency’s Office of Future Mobility and Electrification, but it has to be a group that wakes up every morning committed to the vision. In the absence of such an entity, we run the risk of not maximizing the opportunity of these separate but directly related investments.

The decarbonization of the automotive industry is one of the most profound industrial transformations in the history of the world. Detroit and Michigan must rise to the occasion and lead this transition with ambition, focus and discipline. If we do, we will ensure a positive economic future for decades to come.

Ned Staebler is president and CEO of TechTown Detroit and vice president of economic development at Wayne State University. Bruce Katz is the founding director of the Nowak Metro Finance Lab at Drexel University and is an advisor to Bedrock Detroit.

Previous It's the government's job to make sure there isn't another lockdown
Next How to diversify your risk - Forbes Advisor INDIA