The FT reports on the threat that the electric car revolution poses to auto workers in the U.S. and Europe. Because electric cars have far fewer moving parts some researchers believe that far fewer people will be needed to make the vehicles and the parts that go into them.
The auto industry is fond of saying that if it were a country, it would be one of the world’s largest economies. Its figures show it supports around 7m jobs in the US alone and close to 13m in Europe.
Robots may have encroached on the assembly line already, but wait until the beguilingly deceptive electric car takes off. It might look like any other car from the outside but inside, it is more like a computer on wheels, a very different beast to the internal combustion engine vehicles we drive today. You can get a sense of the disparity from a recent report by some enterprising UBS financial analysts, who tore apart one of GM’s $37,000 Chevrolet Bolt electric cars to see what it cost to make. They found it was $4,600 cheaper to produce than expected and concluded that, with further cost falls likely, electric cars would probably disrupt the industry faster than widely understood.
The report did not dwell on jobs but for an auto worker, its findings are frightening. It said the Bolt had just 24 moving parts compared with 149 in a VW Golf, mainly because electric motors are so much simpler than combustion engines.
That suggests the car industry of the future will need far fewer people to make not just vehicles, but the components that go into them.
There is also the auto repair and service market. Combustion engines have spark plugs and oil that need changing. Electric motors do not require anything like the same amount of maintenance.
It is hard to know exactly what this will mean for the world’s car workers, not all of whom will switch easily from doing an oil change to rebooting a car computer.
Obviously a growing electric car industry should create new jobs in companies that make, say, batteries or software. But an awful lot of people may be left behind. If you talk to people who spend time looking at this, you hear alarming figures. One analyst I spoke to this year said he thought the reason some executives in older car companies were initially reluctant to embrace electric cars was because they understood the implications for their huge workforces. More than 420,000 auto jobs in Germany could be imperilled by a 2030 ban on combustion engine cars being debated there, a study commissioned by the country’s car industry said last week.
All this speaks to a problem about the shift to a greener energy system that is well understood by those who study it closely but yet to attract nearly enough attention from politicians: the need to retrain and possibly compensate workers at the face of rapid industrial change.
Read more here.