Study by the Fraunhofer Institute: E-cars are not job killers after all?

Experts warn that the electric turnaround will cost hundreds of thousands of jobs in the German auto industry by 2030. A new study shows: The downsizing could be less severe.

From Notker Blechner,

Researchers, trade unionists and also car managers have recently warned of massive job losses in the car industry – because of the switch to electromobility. The “National Platform for the Future of Mobility”, for example, sees over 400,000 jobs at risk by 2030.

“Employment losses lower than forecast”

The Fraunhofer Institute considers such scenarios to be exaggerated. “The scenario of massive job losses, which we fear again and again, does not come true,” the researchers write in their study “Employment 2030”, which they carried out on behalf of Volkswagen. “The job losses due to electromobility in vehicle production will be far lower than forecast in previous global studies,” it says.

The scientists compared how much manpower and time will be required to manufacture the VW ID.3 electric car compared to the conventional Golf 8 over the next ten years. The result is relatively surprising: the cost of manufacturing the combustion engine and the electric vehicle is almost the same.

Hardly any effects in vehicle production

It is true that the number of VW employees in vehicle production will fall by twelve percent over the next ten years. The reason for this is not so much the turnaround in electricity, but rather the increasing productivity in the factories, explains Florian Herrmann, one of the authors of the study. The increasing electric mobility will only have a small direct effect on employment, but it will be a trigger and catalyst for further optimization in various areas, according to the study.

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According to internal forecasts, around 11,400 jobs will be lost at Volkswagen for the production of conventional vehicles by 2029. In contrast, a good 8,500 more jobs are required for the production of e-cars.

Cuts in component production

The Fraunhofer Institute only fears massive cuts in component production. According to the study, the manpower required to produce a conventional drive train is 70 percent higher than that required to produce an electric drive train.

So there is a risk of significant job losses, especially since the Wolfsburg-based car company has a comparatively high share of the components. A good 30,000 people are employed in the in-house supplier companies. VW operates a large transmission plant in Kassel. Conventional internal combustion engines are manufactured in Salzgitter, Audi engines in Györ, Hungary.

The Fraunhofer Institute advises cushioning any foreseeable negative employment effects by increasing the number of units and by shifting to the production of new components such as battery cells. Volkswagen is already doing that to some extent. In the Salzgitter engine plant, battery cells will soon be produced together with the Swedish partner Northvolt.

Suppliers at risk

The lower staffing requirements in component production predicted by the Fraunhofer Institute should hit the suppliers particularly hard. They manufacture components such as gearboxes and internal combustion engines that will be less needed in the future.

Bosch boss Volkmar Denner recently warned in the “Welt am Sonntag” of the dramatic effects of the electric turnaround on employment. “The work involved in driving an electric car is ten times less for us than with a modern diesel engine.”

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Denner fears a major shift in the component plants. “Many manufacturers now make their own motors and batteries.” This “insourcing” makes the cake smaller overall – especially for the suppliers.

Side by side of job cuts and build-up

For Volkswagen and the car manufacturers, on the other hand, the future looks brighter. Using the example of Volkswagen, the Fraunhofer Institute comes to the conclusion that there will not be a uniform trend in employment development in the coming decade, “but a multiple interwoven coexistence of job creation, upgrading and elimination”. So not only electromobility, but also digitization will bring new jobs in the automotive industry.

The study by the Fraunhofer Institute is not limited to Volkswagen, explain the researchers. The analysis for the Wolfsburg-based car manufacturer can largely be transferred to the entire automotive industry in Germany.


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