State of Saarland “braces for electric shock” as carmakers switch to e-mobility

The German state of Saarland, home to major suppliers for combustion engine cars, shows the vulnerability of the country’s car industry in a future driven by all-electric vehicles, report Guy Chazan and Patrick McGee for the Financial Times. In an interview, Tobias Hans, Saarland’s state premier, said his state’s reliance on the car industry leaves it uniquely exposed. “We basically build parts for cars with combustion engines,” he said. “[But] we know that by 2030, more than a third of all cars will be electric or hybrid. And that will obviously have an impact on us.”

Saarland’s economy today is dominated by the automotive and steel industries, with two of the state’s 10 largest employers being steel businesses and six car manufacturers or suppliers. The auto industry is also a true giant of the German economy as a whole: its 1,300 companies employ more than 800,000 people, according to official statistics. In terms of turnover, it is the largest manufacturing sector, clocking in sales of more than 400 billion euros in 2015. German carmakers BMW, Daimler and VW have announced ambitious plans to convert car production step-by-step to electric cars. VW has gone furthest with targets – called a “game changer for the industry” by environmental NGOs – to make 22 million electric cars in the coming decade and go entirely carbon-neutral by 2050. Since producing electric engines is much simpler than making combustion motors, and since carmakers use imported battery cells, the shift to electric mobility could sharply reduce the number of jobs in the sector.