2023 Automotive Insights Symposium Day 2 Concluding Remarks Transcript
ESLIE MCGRANAHAN: So on behalf of my colleagues at the Chicago Fed, I want to thank everyone one last time for joining us, our panelists, are attendees, our staff, our organizers, so thank you. And just wanted to sort of highlight one of the things that struck me that Professor Stephanopoulos said earlier, that this event highlights the conversations that we're able to have here at the Chicago Fed's Detroit branch and in general at the Chicago Fed, when we can bring experts together across government, industry, academia, policy, and media to have these important conversations. So it's really exciting to be able to get this group together. And I really appreciate everyone's attendance and this conversation we've been able to create.
Going forward, please continue to engage with us. We do other conferences. We have an active website. We're often reaching out to find out sort of on the ground information, sort of the boots on the ground perspective on the economy. So please do continue to engage with us going forward.
So at my opening remarks yesterday, which now seem quite a long time ago, I set out some questions. And I wanted to sort of return to some of those questions and think about some of the things that I'm taking away from this conversation. So first, from that first panel we discussed about the prospects for the year. And it seems to me that the baseline forecast for is for sales and production to increase relative to last year, but by no means be back to sort of those pre-pandemic levels.
And that the uncertainty, a lot of the uncertainty is very consistent with the uncertainty in the economic picture. So is there going to be a recession in kind of this general uncertainty, which is sort of more typical of the conversations we have historically about what's going-- sort of the sales forecast is conditional on the state of the economy, which is kind of different than this sort of supply chain-based conversation. So it's sort of part of this long return to normal. But as part of the return to normal, there's some other factors that seem to be a big issue.
One is what happens with pent-up demand. Second is this question about whether we're going to return to the inventory model that we had pre-pandemic, or whether sort of this like order your car is kind of back to normal. So what inventory levels do seems really crucial.
And the fleet question as well, like are fleets going to be a big source of demand? But the supply chain issues aren't gone. But like they've dominated the conversation for some time. And now it seems like this economic conversation is sort of dominating.
Turning to the question of affordability, my takeaway is that affordability is multifaceted, that a lot of it is about the purchase price. But there's much more than that. And the purchase price sort of feeds into things about production costs and processes and efficiency and how that all feeds together to create this affordability of the purchase price.
But there's also this question of the total cost of ownership. It seems that the commercial buyers do this very-- they do the math, but that household buyers are sort of not doing the full total cost of ownership math in the same way. There's more emotion. But thinking about the total cost of ownership in terms of costs and insurance and fuel and all those things in a more kind of mathematical way may push more people into EVs.
I also was thinking about Kristen's utility parity concept. And I was really taken by the gentleman from Nissan, who said that maybe you could use your car as a generator at some point, that I could run my sump pump through my car. And I thought that was like an interesting perspective, that at some point, there might be some real utility advantages in that way from the EVs. The other thing about affordability is this question of the trade off between expense and range. Given your average trip is maybe 15 miles, could you have a smaller, less expensive battery and deal with the trade-off that way?
Turning to the question of the inflation Reduction Act, which we've talked to quite a bit, I think the summary of that it's a little confusing seemed to be a pretty strong summary and that there's going to be some iteration and some unintended consequences. But sort of working through those and figuring out the long-term implications are really important. Because this act is at the vanguard of industrial policy. And it's a really big deal, and that there were lots of goals going into it.
And also, I think, from the panelists in general, this overall belief that this transition to EVs could not happen without very active, well thought out federal policy. On the job side, upskilling, I've really thought about this in terms of upskilling. It seems that upskilling is really crucial. But the job issues are far greater than that.
One question about whether the battery supply chain, like how much of that is going to be captured or going to occur in the US seems like a really crucial issue. The other thing I thought from Lorna Payne this morning is the question of what happens to workers when the plants go offline for retooling seems like a really interesting piece of the labor picture. It's not just that your job, you might need a different set of skills. But there are going to be these periods of downtime and how do those get managed as well.
And also on the jobs front, sort of safety and mental health. And also this notion that work is a rewarding activity and working in a really cool sector that's solving some of the climate issues and is on the cutting edge of industrial changes throughout the economy could be very rewarding. Finally, I really liked ending with the exciting, the regional panel, where there's a lot of positivity and just the notion that this transition is scary. But it's also very exciting. And there's lots of interesting developments and changes that are positive and exciting and people are really driven by. And those guys are very, very busy.
So with that, I'm going to turn to our poll question. So thank you for everyone who participated in Pigeonhole. So this is our poll today, which is compared to the current situation for ICE workers, will EV-related production jobs be better, worse, or about the same? So interestingly, 61% said about the same, 28% said better, and 11% said worse.
So that seems like a pretty positive result overall, sort of an interesting result. So with that I wish everyone a safe travels. And thank you for attending, and look forward to ongoing conversations.
ESLIE MCGRANAHAN: So on behalf of my colleagues at the Chicago Fed, I want to thank everyone one last time for joining us, our panelists, are attendees, our staff, our organizers, so thank you. And just wanted to sort of highlight one of the things that struck me that Professor Stephanopoulos said earlier, that this event highlights the conversations that we're able to have here at the Chicago Fed's Detroit branch and in general at the Chicago Fed, when we can bring experts together across government, industry, academia, policy, and media to have these important conversations. So it's really exciting to be able to get this group together. And I really appreciate everyone's attendance and this conversation we've been able to create.
Going forward, please continue to engage with us. We do other conferences. We have an active website. We're often reaching out to find out sort of on the ground information, sort of the boots on the ground perspective on the economy. So please do continue to engage with us going forward.
So at my opening remarks yesterday, which now seem quite a long time ago, I set out some questions. And I wanted to sort of return to some of those questions and think about some of the things that I'm taking away from this conversation. So first, from that first panel we discussed about the prospects for the year. And it seems to me that the baseline forecast for is for sales and production to increase relative to last year, but by no means be back to sort of those pre-pandemic levels.
And that the uncertainty, a lot of the uncertainty is very consistent with the uncertainty in the economic picture. So is there going to be a recession in kind of this general uncertainty, which is sort of more typical of the conversations we have historically about what's going-- sort of the sales forecast is conditional on the state of the economy, which is kind of different than this sort of supply chain-based conversation. So it's sort of part of this long return to normal. But as part of the return to normal, there's some other factors that seem to be a big issue.
One is what happens with pent-up demand. Second is this question about whether we're going to return to the inventory model that we had pre-pandemic, or whether sort of this like order your car is kind of back to normal. So what inventory levels do seems really crucial.
And the fleet question as well, like are fleets going to be a big source of demand? But the supply chain issues aren't gone. But like they've dominated the conversation for some time. And now it seems like this economic conversation is sort of dominating.
Turning to the question of affordability, my takeaway is that affordability is multifaceted, that a lot of it is about the purchase price. But there's much more than that. And the purchase price sort of feeds into things about production costs and processes and efficiency and how that all feeds together to create this affordability of the purchase price.
But there's also this question of the total cost of ownership. It seems that the commercial buyers do this very-- they do the math, but that household buyers are sort of not doing the full total cost of ownership math in the same way. There's more emotion. But thinking about the total cost of ownership in terms of costs and insurance and fuel and all those things in a more kind of mathematical way may push more people into EVs.
I also was thinking about Kristen's utility parity concept. And I was really taken by the gentleman from Nissan, who said that maybe you could use your car as a generator at some point, that I could run my sump pump through my car. And I thought that was like an interesting perspective, that at some point, there might be some real utility advantages in that way from the EVs. The other thing about affordability is this question of the trade off between expense and range. Given your average trip is maybe 15 miles, could you have a smaller, less expensive battery and deal with the trade-off that way?
Turning to the question of the inflation Reduction Act, which we've talked to quite a bit, I think the summary of that it's a little confusing seemed to be a pretty strong summary and that there's going to be some iteration and some unintended consequences. But sort of working through those and figuring out the long-term implications are really important. Because this act is at the vanguard of industrial policy. And it's a really big deal, and that there were lots of goals going into it.
And also, I think, from the panelists in general, this overall belief that this transition to EVs could not happen without very active, well thought out federal policy. On the job side, upskilling, I've really thought about this in terms of upskilling. It seems that upskilling is really crucial. But the job issues are far greater than that.
One question about whether the battery supply chain, like how much of that is going to be captured or going to occur in the US seems like a really crucial issue. The other thing I thought from Lorna Payne this morning is the question of what happens to workers when the plants go offline for retooling seems like a really interesting piece of the labor picture. It's not just that your job, you might need a different set of skills. But there are going to be these periods of downtime and how do those get managed as well.
And also on the jobs front, sort of safety and mental health. And also this notion that work is a rewarding activity and working in a really cool sector that's solving some of the climate issues and is on the cutting edge of industrial changes throughout the economy could be very rewarding. Finally, I really liked ending with the exciting, the regional panel, where there's a lot of positivity and just the notion that this transition is scary. But it's also very exciting. And there's lots of interesting developments and changes that are positive and exciting and people are really driven by. And those guys are very, very busy.
So with that, I'm going to turn to our poll question. So thank you for everyone who participated in Pigeonhole. So this is our poll today, which is compared to the current situation for ICE workers, will EV-related production jobs be better, worse, or about the same? So interestingly, 61% said about the same, 28% said better, and 11% said worse.
So that seems like a pretty positive result overall, sort of an interesting result. So with that I wish everyone a safe travels. And thank you for attending, and look forward to ongoing conversations.
