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Potential Subaru electric vehicle facility could impact Indiana workforce

Electric vehicle production could benefit changing Indiana workforce

INDIANAPOLIS (WISH) — Subaru is eyeing Indiana for a new electric vehicle production facility, according to a report from Reuters.

Andrew Butters, an Indiana University Kelly School of Business Associate Professor of Business Economics and Public Policy, says a potential new electric vehicle production site has the opportunity to bring new jobs to Indiana and help modernize the workforce as more drivers look to electric cars and demand starts to increase.

“A new plant would basically be an increase in the number of jobs Subaru would be employing Hoosiers with,” Butters said. “As well as these are typically highly productive jobs.”

Electric vehicles require fewer parts and less labor to create meaning there will be fewer jobs to produce these vehicles and this change comes at a time when the labor force in Indiana is aging and retiring.

“We are both an aging population but also a population that has, right now, a shortage of workers,” Butters said. “We have many many more jobs than we have people unemployed or looking for work.”

Electric vehicle sales are on the rise. In 2011, only 0.2% of car sales were EVs, but by 2021, that number rose to 4.6%. Staying in front of this trend can help to keep Hoosiers employed.

“It would certainly bring a nice amount of employment to the state,” Butters said.

Butters calls these jobs productive and notes while there may be fewer of them as compared to internal combustion engine plants, electric vehicle jobs could bring higher pay to Indiana workers.

“Those jobs might also lead to being more productive and so that will translate usually to higher paying jobs,” Butters said. “Sometimes a higher skill is required to work in those jobs. And so on the net in terms of the employment count it might end up decreasing but again the productivity. You might see an increase.”

This all comes after the General Assembly’s State Budget Committee met last month and considered incentives to bring an unidentified factory to Indiana worth $3.2 billion. There has been no announcement on the company behind this proposal. Governor Holcomb recently met with Subaru executives in Japan but specifics of the trip were not released.

The Reuters report can be read here.