-This is the first of two videos about the analysis of macroeconomic challenges of electric cars at the country level. The aim for this video is to grasp the concepts of industrial production, industrial employment, industrial added value and industry. And also to grasp how a country can tackle the industrial challenges of electric cars based on its specific industrial equipment. The World Bank and the Organization for Economic Cooperation and Development, the OECD, define industrial production as the production from industrial establishments and specify that it not only applies to the manufacturing sector but also sectors such as mining or agribusiness and collective public services of electricity, gas and water supply. Industrial production comes with strong challenges on a national scale, in terms of employment and added value, i.e. the added created wealth. The share of industry in national employment of most developed countries strongly decreased in the late 20th century and then in the 21st century. Industry only represented 18% of jobs in the United States in 2015 when it was 25% in 1990, 20% in France in 2015 when it was 30% in 1990, 28% in Germany in 2015 when it was 50% in 1990. According to Eurostat, the EU has lost 17% of its industrial jobs, 1 out of 6, or 7 million jobs over 20 years, between 1995 and 2015. In China, on the contrary, which was going through an industrial boom, the share of industry in employment grew from 21% in 1990 to 29% in 2015. The car manufacturing industry lost 112 000 jobs in France between 1990 and 2015. So in 25 years, it lost a third of its jobs. The share of industry in national wealth as measured by the GDP is also decreasing in many developed countries. The drop of industry in terms of added value is however less pronounced than in terms of jobs. This suggests for now a better retention rate on their territory of high-added-value industrial jobs in developed countries. In France and in the US, industry only represents 20% of the national wealth when it was 25% 20 years earlier. Since 2010, there has been a stabilization of the contribution of industry to national wealth in the US and in France around 20%, in most European countries around 25% and in Germany around 30%. Based on the French national institute for statistics, the INSEE, "industry" implies all complementary activities which contribute, upstream and downstream, to the realization of a finished product. The electronic industry covers from the silicium to the computer and all its components. The automotive industry covers steel transformation to vehicle assembly and equipment manufacturing. The automotive industry can be broken down in segments. Upstream, we have all branches which provide the other branches, such as the raw material extraction and transformation industries, or mining and steel industries. The branches in the central segment handle the transformation and manufacturing of the components and finished product, such as the car manufacturing industry. Downstream, we have all activities which buy from the other branches. For instance, we have distribution and especially car dealerships. Since electric vehicles will change the architecture of motor vehicles, their engines and some of their parts may regalvanize the automotive industry in developed countries where it is declining. In addition, since it requires electricity storage technologies, electric vehicles may also lead to the emergence and development of new industries in the battery sector. Some countries see the rise in electric vehicles as an opportunity to develop integrated industries, in order to control the entire added-value chain from upstream to downstream. Upstream, they can control the extraction and transformation of essential raw materials such as rare-earth elements, neodymium, dysprosium or samarium, used to produce the compact magnets present in electric vehicle engines, or lithium which is used in batteries. Downstream, they can control the service industries link to vehicle recharging in order to create synergies with an electric power industry which uses renewable sources, especially if it is intermittent, such as wind power or photovoltaics. All these industrial challenges will have different consequences depending on whether the country has an automotive industry, be it historical or developing. Historical national industries in developed countries have suffered a lot since the 1990s because of the competition from Asian countries, Japan, Korea and China. They have to be regalvanized to keep their jobs on their territories. This explains the support for electric vehicles in Europe and the US. Some emerging countries, such as India or China, have strong ambitions for their automotive industry. They are also susceptible of supporting electric vehicles for their positive consequences for the industry. The industrial challenges of electric vehicles have different consequences if the country has an energy storage industry using batteries or not, be it historical or developing. Batteries have potential uses in transportation, cars, buses, trucks, etc., but also in electronics or for stationary use in construction. The main manufacturers of lithium-ion batteries, the most common in the automotive industry, are Japanese, Korean or Chinese. The support of some countries to electric vehicles can also consider potential synergies with upstream or downstream industries. Upstream of the automotive industry, countries with a lot of raw materials used to make electric vehicles can be promoters of these vehicles. China produces about 97% of rare-earth elements in the world. Most of the lithium reserves are in developing countries in South America, Bolivia, Chile, Argentina, in the United States and in China. And downstream of the automotive industry, some countries transitioning toward electricity production from renewable sources, especially intermittent wind or photovoltaic power, want to control all industries and services linked to vehicle recharging to create synergies with their generation of renewable electricity. The global market for the production of photovoltaic cells and panels is dominated by actors from China, Taiwan, Japan, Malaysia, Germany and the United States. The main wind turbine manufacturers are Chinese, American, Danish, German and Spanish. The position of China when it comes to these industrial challenges is very specific as it is the only actor with a quickly-growing automotive industry, an energy-storage industry using batteries, significant resources of rare-earth elements and lithium and an electric power industry using wind turbines and photovoltaics. To conclude, electric vehicles can pose major industrial challenges for countries with industries which are fit to produce them. They may regalvanize declining automotive industries in developed countries. They may also help develop new industries, especially regarding electricity storage using batteries. And lastly, they may help countries to control integrated industries upstream and/or downstream of their added-value chain. The challenge for these countries could be quantified in terms of job and national wealth creation.
