U.S. Energy Secretary Jennifer Granholm argued that replacing gas-powered vehicles with electric vehicles will strengthen the automotive job market, despite recent layoff announcements by three major auto companies.

Granholm told attendees at a Detroit Free Press breakfast event in June that electric vehicle “jobs of the future and the jobs of the present will be extremely fulsome.”

At the same time, the former Michigan governor said, “There are fewer assembly jobs, clearly, for an EV.” But Granholm is confident that “if we are smart about getting this full battery supply chain, those are jobs that are additive jobs.”

Granholm said Michigan will gain jobs once a cluster of battery manufacturing plants develops.

Manufacturers in Michigan have announced plans for new investments in electric vehicle manufacturing while also cutting thousands of jobs.

In June 2022, Ford Motor Co. promised that a $3.7 billion investment would create 6,200 new hourly jobs in Michigan, Ohio and Missouri. Two months later, Ford cut 3,000 salaried jobs —many in Michigan— to compete more aggressively with Tesla in the electric vehicle market.

Layoff notices have followed soon after nearly every promise government officials have made that the transition to EVs will lead to job growth.

Electric vehicle production, like other green energy initiatives, struggles to compete against traditional technologies without massive government subsidies. But relying on government subsidies is not a cost-effective strategy for achieving job growth.

In April, Stellantis announced it is cutting 30,000 jobs because of the EV transition. In May, General Motors also announced a plan to cut hundreds of jobs as it shifts production from internal combustion engines to electric motors.

Companies that received economic development incentives “experienced employment growth that was 3.7% slower than nonincentivized establishments,” according to a 2019 study in the peer-reviewed journal Urban Affairs Review.

“When we examine the overall effectiveness of state incentive grants on firm-level performance,” the study concluded, “we find little evidence that they generate new jobs or other direct economic benefits to the states that employ them.”

A 2020 study by the Mackinac Center found similar results after analyzing nine different types of Michigan incentive programs and more than 7,300 deals. Of the nine programs examined, only three led to job creation. Each job created through the three successful programs cost the state an average of $593,913 per year. Granholm spearheaded one of those programs during her time as Michigan governor.

Government-subsidized battery plants have not caused meaningful job growth in Michigan. As the state’s auto industry transitions from gas to electric, Michigan residents have instead struggled to keep their jobs.

Therese Boudreaux is a Michigan Capitol Confidential intern.