Reservations from regulations

The US seems dead set on derailing the progress of renewable energy sources.

This year, we've noticed a somewhat troubling trend throughout the US around renewable energy sources, particularly solar and wind energy. The first news we saw was that the Environmental Protection Agency (EPA) actually cancelled a grant worth $7 billion that was intended to help pay for residential solar projects of over 900,000 low-income households across the country.

This was a gut blow to the industry, but the bad news unfortunately didn't stop there. From tougher subsidy rules for solar and wind energy to other funding projects being discontinued, the trajectory for cleaner energy solutions in the US doesn't look all that promising. And all of this is bound to have an impact on clean propulsion and mobility too - both from a talent availability and an investment perspective. 

So what does this mean for the future of clean propulsion in the US? Will it lead to stagnation of the market, or will there be a way forward?

Brain drain

Many people working in clean energy industries in the US will see some of the recent news as a statement of intent about the future of their industry. And when uncertainty rears its head, that's often when people go looking for new work. 

People who are looking to jump ship have two main options they could take to continue their career in clean energy - move abroad, or move industry. 

The first option is more disruptive, but by moving to a hotspot of clean energy production - somewhere like China - they could stay at the forefront of innovation. For those with limited ties to the US and the knowledge and skills to be desirable, this could be an attractive proposition and could very well come with an increased salary, too. Whilst the US may not currently see the value in the likes of solar and wind energy, could it regret losing all the skills and knowledge in these areas in the future?

The other option keeps people closer to home, but moves the industry. Now, whilst this news might be making EV manufacturers and other clean propulsion organisations a little nervous, it's not directly impacting them right now. Whilst not identical industries, there are skills from the production of clean energy solutions that are very transferable into clean propulsion. The allure of staying close to home to utilise their skillsets could be a big draw for talent as opposed to moving to the other side of the world, so companies working in these areas could see an influx of skilled talent being readily available from these new rules.

Rising costs

This point relates to classic economic theory. Less funding into clean energy leads to a lower supply of not only clean energy itself, but the materials it takes to produce it as well. This overall fall in supply will likely lead to a deficit in the market, pushing the prices of these up for all. Rising costs mean that clean propulsion companies have a few options: either pass these costs onto the customers or cut costs elsewhere…

With the current high price of cars that run using clean energy when compared to the rest of the market, the only option we see happening is cutting internal costs elsewhere. And this is likely to include cuts to internal recruitment budgets. With fewer resources available, companies will likely find it harder to compete for talent from a financial perspective as competitors in adjacent industries will have the capacity to offer higher base salaries. 

For clean propulsion companies to compete for top talent, it will come down to the non-financial elements of the job offer (think flexible working, annual leave offerings, health insurance) as well as pushing the mission of the company in any job adverts. There are certain people who will take a slightly lower salary if they believe in the mission of the company that they are joining, and helping to produce clean vehicles is quite the mission to get behind.

Greater focus on EVs

Now it's time to turn the previous two arguments on their head and focus on the side of clean propulsion that could really benefit from these new legislations: electric vehicles. Already the frontrunner in the race to become the most prominent form of clean propulsion, the lack of funding in other areas should only further cement its position in the market. There will be fewer and fewer alternatives to electric vehicles, so for customers looking for a vehicle that's not damaging to the environment, the only feasible option will be electric vehicles.

For US companies in the electric vehicle industry, this will also vastly improve their ability to attract top talent. Their message to market remains strong, they have fewer competitors to contend with, and they will likely have greater financial resources to play with. In fact, the main threat of losing talent will come from other electric vehicle companies. To stand out against these similar companies, it will come down to the smaller, but nevertheless meaningful, elements of the job package. How good is the work-life balance on offer? Is the workload likely to be more manageable compared to other roles? Are the working hours and conditions more favourable? Making these differences clear to anyone applying could truly be the difference maker.

All of this has shown that the overall market for clean energy across the board may not have great prospects in the near future, but there certainly will be some winners in the clean propulsion space.