Will 400,000 German car industry employees lose their jobs by 2030?

Earlier this year, the NPM (National Platform Future of Mobility) predicted 400,000 car industry jobs in Germany could be gone by 2030. The NPM is a research agency funded by the German government.

DW reports that the main reason behind this prediction is the rapid transition from internal combustion engines to electromobility, or electrification, accelerated by the EU's 2030 climate targets for the transport sector.

Electric cars require 6 times fewer parts. Hence, far fewer workers are needed to build them. The situation is further worsened by the massive investments required to remain competitive in the shift to electric cars. Volkswagen, for example, is to invest 33 billion euros for electrification. It is predicted that job cuts are underway.

With electric car manufacturing being easier to automate, a higher degree of manufacturing automation is also predicted.

On the other side of the argument, the VDA (German association of automotive industry) says the 400,000 jobs loss prediction is based on an extremely unrealistic scenario. The VDA however, does admit that large-scale job losses are inevitable in the rapidly changing industry. ELAB, an electromobility think tank predicts about 90,000 job losses by 2030.

Contrary to the prediction by the NPM, Volkswagen’s conversion of its Zwickau plant to an all-electric plant saw zero job losses by converting to an all-electric facility. The electrification of the car industry could even create new employment opportunities.

Employee retention is also highly possible since German car industry workers are classified as high or intermediate skills and can be retrained for electromobility.

As of 2019, Germany’s car industry had a total of 830,000 direct employees. This figure is according to reports by the German Federal Bureau of Statistics (Destatis). In a statement provided to DW, the VDA pointed out that as of the end of April 2020, there were still 814,000 people employed in the car industry. Due to the COVID-19 pandemic, 50% of workers have been put on short time work schemes.

Letting staff go is an expensive decision for carmakers in Germany, and often require approval from the workers themselves. The worker representatives in Volkswagen, for example, have effective veto power on Volkswagen’s supervisory board.

With the fast-paced changes in the automotive industry, car makers have to adapt quickly to remain competitive.