EV Could Lead to Job Cuts

Major car manufacturers are moving towards increased production of electric vehicles, threatening thousands of workers in the automotive industry with job losses as their jobs become redundant due to new technologies and production processes.

Ford and Volkswagen believe that the production of electric cars will require 30% less manpower than the production of fossil fuel-powered cars. Ford, in particular, has already planned to lay off 8,000 employees.

AlixPartners, a consultancy firm, estimates that it takes 40 percent less labour to produce an electric motor and battery for an electric car than it does to produce an engine and transmission for an internal combustion engine vehicle.

According to a study by the Economic Policy Institute from Washington DC, the US could lose 75,000 jobs in the automotive industry by 2030 if the share of domestic sales of electric vehicles rises to 50%. Currently, that figure is around 5%.

European car suppliers estimate that the rapid electrification of the automotive industry could cost them 275,000 jobs by 2040, even taking into account new jobs related to the production of electric vehicle parts.

Boston Consulting Group estimates that the switch to electric vehicles in Europe by 2030 will result in 630,000 job losses for vehicle manufacturers and suppliers of parts for internal combustion engine vehicles. At the same time, the growing demand for batteries and EV infrastructure will create 580,000 new jobs:

While the core automotive industry will certainly suffer significant job losses, some new industries that support electrification will experience tremendous job growth.

However, the appearance of new jobs does not guarantee that the redundant workers will be the ones to take them. In addition, battery plants require less labour and lend themselves to automation.