June 25, 2024

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EV transition could cost 500,000 jobs, supplier group says

PARIS — The transition to electric vehicles from internal combustion powertrains could mean the loss of up to 500,000 jobs at automotive suppliers in the EU by 2040, according to a new study by the industry trade group CLEPA.

Those job losses will not be fully offset by a corresponding growth in EV components, which the group said would generate only 226,000 new positions, for a net loss of 275,000 jobs.

That scenario could play out if the EU enacts a proposal in its “Fit for 55” package to allow only zero-emissions vehicles to be sold after 2035. Along the way, emissions would fall by 55 percent from 2021 levels by 2030. The package of proposals was released this summer.

The suppliers’ group is calling for a mixed-technology approach to emissions reductions, including hybrid technologies, so-called green hydrogen and renewable fuels. That approach would still cut emissions by 50 percent and maintain current employment levels, CLEPA said.

“The study highlights the risks of an EV-only approach for the livelihood of hundreds of thousands of people working hard to deliver the technological solutions for sustainable mobility,” CLEPA Secretary General Sigrid de Vries said in a news release Monday. 

According to the report, prepared by PwC for CLEPA, 1.7 million people work at automotive suppliers in Europe, with an additional 1.2 million jobs at automakers. 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.

The study considered three questions:

  1. What is the impact of different powertrain technologies on the value that suppliers can add?
  2. What is the corresponding effect on jobs?
  3. What is the effect on climate targets?

The majority, 70 percent, of the electric vehicle “value add” would come from batteries, from raw materials to cells to pack assembly to recycling. However, that industry is just ramping up in Europe, with many gigafactories planned but few currently in operation.

As that industry develops, jobs at internal-combustion suppliers will drop off sharply, especially after 2030, the study found. There are 599,000 positions in the sector today, but that figure will fall to 513,000 in 2030 — and just 153,000 in 2035.

The study envisions three powertrain scenarios:

  1. Mixed technology, which would still cut CO2 emissions from the current 95 gram per km to 20 g/km in 2040, and would add about 200,000 jobs by that year
  2. EV-only, which would cut emissions to zero by 2040, but with a corresponding loss of 275,000 positions
  3. A “radical” situation, in which emissions are cut to zero by 2030, but job losses would top 360,000.

“Society’s needs are far too diverse for a one-fits-all approach,” de Vries said in the release. “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.”

The biggest job losses would be in Germany (121,000), Italy (74,000), Spain (72,000) and Romania (56,000).