What will happen after car companies start to go electric?

CSP Daily News

The economic principle I’m exploring is “Because of scarcity, people choose. All choices have an opportunity cost”.

My research question to help me study the economic principle is “How does going electric affect a car company?”

 The article published in Inform Blog titled “The impact of electric vehicles on automotive logistics” demonstrates this economic principle by showing that going electric affects part suppliers, there must be an increase in safety and handling requirements, and there must be an increase in charging stations. 

First, going electric affects part suppliers. For decades, car companies have been using the combustion engine. This engine consists of about 1,200 different parts. However, in new electric engines, there are only about 20 parts. I believe this will lead to the fall of many part suppliers as exhaust systems, pistons, cooling systems, etc. will no longer be needed. Instead, new companies that produce, for example, batteries will rise to the top.

Second, there will be an increase in safety and handling requirements. For automakers, it will raise the question of should the company make components in house or buy them? I believe this will be a growing problem as batteries require complex, high quality chemical equations that most companies aren’t capable of. This is where chemical engineers come in. With chemical equations being necessary, there will be an increase in jobs for these engineers because without them, research and development would come to a halt.

Third, there must be an increase in charging stations. Just like normal combustion engine cars, electric cars need to “refuel” in a way. Instead of having gas stations, car companies must hope for the fact that there will be an increase in the amount of charging stations. Because without them, their cars would not function. This will lead to new job opportunities as charging stations would require an investment and labor to build them. I believe charging stations could be the answer to many unemployment problems. 

In my next blog post I will research the question: Can Earth afford for car companies to go electric?