Shift to e-mobility will cost fewer jobs at carmakers than feared, suppliers hit harder – VW study

The shift to electric mobility will cost fewer jobs at carmakers than many experts and unions assume, a study commissioned by Volkswagen and conducted by the Fraunhofer Institute for Organization and Industrial Engineering has found. “Our results show: The negative impact on employment will not be as dramatic as feared. We can control this,” said Michael Sommer, former head of the country's trade union confederation DGB, who now sits on VW's advisory board. But while the study suggests employment impacts at the carmakers will only be limited, it also indicates that the supplier industry could face significant job losses.

The researchers compared VW's plans for the manufacturing of conventional vehicles and electric cars, choosing VW's Golf and the company's all-electric model ID.3 as representative examples. "The job losses from the introduction of electric mobility are likely to be substantially lower in the area of vehicle manufacturing than global studies have predicted," the report says. The researchers expect employment in this area to fall by 12 percent in this decade, but mainly due to planned output volumes and higher productivity. "With respect to component manufacture, however, labour requirements are 70 percent higher for the production of a conventional powertrain than for the production of a powertrain for an electric vehicle," the study says. Within VW, this "can be cushioned by boosting output volumes and by shifting to the production of new components (for example battery cells)." But many suppliers specialised in making components for conventional cars have few options to shift production.

The automotive industry directly employs more than 800,000 people in Germany, and another 1.3 million employees work in sectors linked to the industry, accounting for almost five percent of all domestic jobs, according to the study. Earlier studies predicted employment losses of between 35 and 62 percent across the German automotive industry by 2030 as a result of the switch to electromobility, according to VW. The study concludes that "there is no uniform employment trend in the 'transformation corridor' over the coming decade. Instead, there will be a complex, interconnected mixture of job creation, job upgrading and job cuts." It argues that it will be vital to ensure that small and medium-sized enterprises (SMEs) do not fall victim to this reorganisation, and warns that Germany's automotive sector must establish new forms of cooperation so as not to "recklessly surrender the field of mobility to new market players."