Will the transition to electric vehicles lead to job losses?
A new study by the industry trade group CLEPA predicts a net loss of 275,000 jobs at automotive suppliers in the EU by 2040. The job loss scenario could be a result of the EU's enactment of a proposal in its "Fit for 55" package to allow only zero-emission vehicles to be sold after 2035. While emissions would fall by 55 percent from 2021 levels by 2030, automotive suppliers could lose up to 500,000 jobs.
According to the report, prepared by PwC for CLEPA, 1.7 million people work at automotive suppliers in Europe. Additionally, 1.2 million work at automakers and there are also about 1.21 million jobs in activities such as tires, body manufacturing, chemicals, batteries and electrical equipment, and 3.2 million in support services.
Suppliers demand a mixed-technology approach
To reduce emissions, the supplier's group is recommending taking a mixed technology approach. including hybrid technologies, green hydrogen and renewable fuels. As per CLEPA, that approach would still cut emissions by 50 per cent and maintain current employment levels.
"Society's needs are far too diverse for a one-fits-all approach," said CLEPA Secretary General Sigrid de Vries.
She reccomends 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."
Is it a matter of perspective?
In another view, unlike CLEPA, BCG endorses a fast transition to electric vehicles. "Maintaining or even accelerating the transition to EVs as the core automotive technology for the near term is essential to give a 'green boost' to employment.
Taking a more optimistic view, BCG's report highlights a total of 2.4 million workers will need retraining, with 1.6 million remaining at their current jobs and companies, with 'slightly different requirements'. For instance, 610,000 staying in the industry but relocating, such as going from transmission to electric motor production. Furthermore, 225,000 expected to take full 'requalification and relocation', such as moving from auto assembly to battery cell factories.
Can the job loss challenge be tackled with proactive upskilling? Probably. However, if there are not enough jobs for skilled labour, even all the upskilling efforts could go in vain.