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Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

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EV Revolution Could Cost Thousands Of Jobs

EV

“Electric cars are disasters. They are evil.” This is what the head of one of the largest labor unions in the auto industry told Reuters last week.

Ha Bu-young, head of the Hyundai Motor union said the company’s employees feared for their jobs when EVs began being produced on a wider scale—and production is only going in one direction now.

Ha Bu-young is not the first to warn about the not-so-glamorous aspects of EV adoption. For all its advantages in emissions, EV technology will change the industry in many ways and one of them will be employment. EVs will require fewer workers because they don’t need internal combustion engines or multi-gear transmissions.

Back in 2016, the chief executive of tire-maker Continental warned that the shift to electric vehicles would cost industry jobs. Truth be told, Elmar Degenhart said that many jobs will be created by the push into EVs, although he also said it was too early to predict whether the new jobs would be enough to offset the losses.

The numbers are certainly impressive: at Continental alone, Degenhart said, there are as many as 30,000 job positions directly dependent on the production of internal combustion engine cars; and Continental is not even a carmaker.

Hyundai’s Ha Bu-young now predicts that a shift to more EVs at the company could lead to the loss of as much as 70 percent of jobs. That’s under a worst-case scenario. As of the end of 2016, Hyundai’s workforce stood at almost 120,000 people globally. Even a best-case scenario, then, will see several thousand jobs cut, and that’s just at Hyundai.

Last year, JP Morgan Cazenove also issued a warning for the auto industry, saying the EV revolution will leave a lot of losers in its wake, CNBC reported in August. Yet JP Morgan’s analysts did not stop at job losses.

In a note, they said that because of the massive difference between running costs for ICE vehicles and for EVs, car dealers also stand to lose income from after-sale maintenance and repairs.

Related: Europe Cracks Down On Diesel Vehicles

EVs have just 20 moving parts as opposed to 2,000 for ICE cars, and as a result they last longer and carry about a 10th of the running costs associated with ICE cars, JP Morgan’s team estimated.

"We see this as a meaningful risk for car dealers who rely on after-sales service for a large chunk of their profitability,” the analysts wrote. “This should over time reduce the number of vehicles sold as well, in addition to other potential trends, such as automated driving and greater car utilization rates."

The United Auto Workers union is also worried.

Last year, its vice president and boss of the Ford division of the UAW, Jimmy Settles, said the union was pressuring Ford into preserving jobs despite the fact that EVs require far fewer people to work on them because of the fewer elements to be assembled and the faster assembly times. For now, Ford jobs seem safe, at least that’s what the management has told the union.

The time it is taking EVs to join the transportation mainstream is the good news for the workers. While producers seek to improve batteries to make the vehicles more affordable, there is time to consider options for the future. These remain unclear for the moment, so it might be reasonable to start paying more attention to the warnings.

While EVs are hardly evil inherently, they will change the industry and changes are not always singularly good for everyone affected by them.

By Irina Slav for Oilprice.com

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  • Colin MacDonald on April 02 2018 said:
    If EV's require so little labour to make why are they so expensive? Why is it so difficult for Tesla to meet its production targets?
    Elon Musk has asked his workforce to work for free so that he can get a feasible output through the door; this doesn't suggest that future auto worker unemployment is likely to be a problem.
    Perhaps the author of this piece can back up his thesis with hard evidence. How many hours does it take to build a Model S? How does that compare to an Audi A6?
  • Bill Simpson on April 02 2018 said:
    Electric vehicles, if built with good quality control to begin with, need almost no maintenance. The only thing needed would be new tires and windshield wiper blades, every so often. Independent repair shops will nearly go away. Body shops will still be needed to repair wreck damage. But self driving cars will eliminate most of them. But that will be 20 years from now, after the fleet is finally mostly self driving. Insurance costs will go way down, since wrecks will be rare. Medical cost will go down a little, due to fewer injuries from wrecks. Trial lawyers will take a hit too, which is a wonderful development where I live, since their lawsuits are responsible for a lot of the high cost of automobile insurance.
    So electric cars will change a lot, but the transition will play out over the next 30 years.
  • snoopyloopy on April 05 2018 said:
    Yes, some jobs will be lost for sure. Thus, it is important to put retraining and job placement programs in place BEFORE it becomes a big societal problem. However, there are still a lot of parts that are common to both EVs and ICEs that will need to be fixed (e.g. interior trim, suspension, HVAC, infotainment). The real threat to auto manufacturing jobs is automation, not EVs. Companies will continue to introduce more technology into the assembly process that removes humans from the line, with each change costing some jobs in the process.

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