Shift to EVs puts 500,000 auto jobs at risk, warn suppliers

The European auto suppliers association CLEPA has warned that half a million automotive sector jobs could be placed at risk under EU plans to effectively ban the sale of combustion-engine cars by 2035.

According to a CLEPA-commissioned poll of around 100 auto components firms, carried out by PwC, 501,000 jobs in the sector are expected to become obsolete if combustion technology is phased out by 2035, with 70% of those vanishing in the five years before then. The time frame and scale of the mass unemployment would, CLEPA says, make mitigating the "social and economic impacts" very difficult.

However, the survey also found that 226,000 new jobs would be created in the manufacture of electric parts between now and 2040, assuming the EU's battery value chain is in place. This brings the net job losses to 275,000, or 43% of the current workforce.

Henning Rennert, Partner at PwC Strategy& Germany, said: "While electrification puts powertrain employment at risk, on the one hand, other workforce skills around areas such as software or infrastructure will be needed in the future. The future value-add and job creation in powertrain technologies depends on local battery production in Europe."

Read more: EU lays out "Fit for 55" goals to cut carbon emissions

In July, Brussels revealed its "Fit for 55" goals, which included a plan to eliminate all CO2 emissions from new cars by 2035, placing a de facto ban on the sale of combustion-engine powered vehicles. While the Commission's plan did not stipulate that they be replaced by battery-powered cars, some auto companies such as Volkswagen, have all but ruled out using other technologies like hydrogen.

Representing over 3,000 automotive components firms, CLEPA has long advocated for the use of interim technologies to soften the blow of the transition.

CLEPA Secretary-General, Sigrid de Vries, said: "Innovations by automotive suppliers have made electric mobility increasingly accessible for consumers and an essential instrument to meet emission reduction targets. But society’s needs are far too diverse for a one-fits-all approach.

"A regulatory framework that is open to all available solutions, like the use of hybrid technologies, green hydrogen, and renewable sustainable fuels will enable innovation as we redefine mobility in the coming decades."

CLEPA's announcement is the latest in a series of warnings about the costs and problems with a rapid transition to electric vehicles and zero-emissions technology.

Last week, Stellantis CEO Carlos Tavares told a Reuters conference that the pace of the transition was "putting the industry on limits" and that the development costs for the new technology could mean job losses.

Read more: One-In-Ten New Cars In Western Europe Were Electric This Year

Tavares' words came after a similar warning from Continental, Germany's largest listed auto parts supplier, which cautioned that "social harmony would be jeopardised" if climate policies were not accompanied by programmes creating new opportunities for employment for workers in industries reliant on fossil fuels.

Last year, a report sanctioned by the German government found that as many as 400,000 jobs could be lost in the country because of the shift to battery-powered vehicles.

However, Volkswagen CEO Herbert Diess has dismissed such doomsday scenarios as "probably a bit overstated".

"A lot of the car remains the same. It’s still seats, paint, bodywork, interiors, wheels, axles," he said.

"For some, if you work in fuel injection systems or gearboxes, it’s probably a bigger transition. I would say for 70 to 80% of the automotive supply industry, there is no transition."

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