Going electric could cost the auto industry hundreds of thousands of jobs

going electric could cost the auto industry hundreds of thousands of jobs

The Volkswagen ID.4 is built at a plant in Germany. Jan Woitas/picture alliance via Getty Images

  • The global auto industry is barreling full-steam toward an electric future. 
  • Automakers and suppliers could lose jobs on a large scale amid the transition. 
  • Electric cars require less manual labor and different skillsets than conventional vehicles.

Automakers from General Motors to Toyota are on a mission to phase out gasoline vehicles.

And while a future full of clean, electric cars will help reduce harmful emissions and stunt climate change, it may spell disaster for the thousands of auto workers whose jobs will be rendered obsolete by new technologies and manufacturing processes.

As one might surmise, workers who assemble gasoline engines, transmissions, exhaust systems, and the myriad of other parts not needed in electric vehicles will likely bear the brunt of the transition. Moreover, electric motors and batteries are much simpler than traditional powertrains, allowing carmakers to maintain the same production output with fewer workers.

Both Ford and Volkswagen have estimated that electric cars require 30% less labor than conventional vehicles. The consulting firm AlixPartners reckons that 40% less labor goes into an EV’s motors and battery pack than an engine and transmission.

The impact this epic shift will have on automotive employment isn’t fully understood yet. But some industry watchers warn that the sector will lose jobs.

“The industry is going through a transition unlike anything we’ve ever seen,” Brett Smith, director of technology at the Center for Automotive Research, told Insider. “There’s a pretty strong chance that there will be fewer people building these cars, fewer people building the parts to these cars, and that will create challenges in some automotive communities.”

In a September study, the Economic Policy Institute, a liberal think tank, said that the US could shed 75,000 auto jobs by 2030 if electric cars rise to 50% of domestic sales. (Today, they account for around 5%.) European automotive suppliers estimate that rapid electrification could cost them 275,000 jobs by 2040, even accounting for new positions that arise making EV parts.

To be sure, a flurry of activity in battery and motor production will offset the erosion of traditional automotive jobs to some degree, but not without massive upheaval.

According to an analysis by Boston Consulting Group, the shift to EVs in Europe will result in 630,000 fewer jobs at automakers and suppliers of parts for combustion-engine vehicles by 2030. But booming demand for batteries, charging infrastructure, and the like will create 580,000 new roles.

“While the core automotive industry will certainly suffer significant job losses, some new industries that support electrification will experience tremendous job growth,” the firm said. When all is said is done, policy measures to spur domestic EV production could help the US add 150,000 automotive jobs overall, the Economic Policy Institute estimates.

Still, there’s no guarantee that displaced workers will benefit from newly created positions. “It’s not going to be the same people getting new jobs. It’s often going to be new jobs created in new places for new people,” Smith said. Automakers and their partners are planning a slew of battery plants in the US, but many of those factories will be far away from current auto manufacturing. Battery packs lend themselves to automation, Smith added.

going electric could cost the auto industry hundreds of thousands of jobs

White-collar jobs won’t be immune either. People who design systems for combustion vehicles will either need to be retrained so they can apply their skills to the next generation of EVs or face losing their jobs, said Tammy Madsen, a business professor at Santa Clara University.

These cuts may already be underway: Ford reportedly plans to lay off some 8,000 salaried employees from its combustion-engine division.

While nobody can predict the exact contours of the budding EV revolution, it appears that the technological shift will disrupt automotive manufacturing and employment as much as it will overhaul the makeup of streets and highways.

“We absolutely have too many people in some places, no doubt about it,” Ford CEO Jim Farley said on a recent earnings call. “We have skills that don’t work any more, and we have jobs that need to change.”

Read the original article on Business Insider

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