October 4, 2023

The underbody of an ID.3. On January 29, 2021, work will be carried out on an electric vehicle at a Volkswagen plant in Dresden.

Matthias Rietschel | Image Alliance | Getty Images

The switch to electric vehicles could affect thousands of workers in Germany in the coming years, the Munich-based Ifo Institute announced on Thursday.

The Ifo study, carried out on behalf of the German Association of the Automotive Industry, highlights some of the potential challenges that lie ahead of us when governments try to withdraw diesel and gasoline vehicles in favor of low-emission and zero-emission vehicles.

In a statement released along with the report’s release, the research institution said that an estimated 75,000 production workers in the German automotive sector would be retiring by the middle of this decade.

“However, if internal combustion engine car production declines to the extent required by current emissions regulations by 2025, at least 178,000 employees will be affected by the switch to electric motors,” he added.

That cohort, Ifo explained, would consist of “workers who manufacture groups of products that are directly or indirectly dependent on the internal combustion engine, 137,000 of whom are directly employed in the automotive industry”.

Ifo President Clemens Fuest described the “transition to electromobility” as “a major challenge, especially for automotive suppliers in which medium-sized companies dominate”.

“It is important to keep high-skilled jobs in the remaining production of internal combustion engines and in electric vehicles without slowing down structural change,” he said.

A major transition does indeed seem on the horizon. The federal government wants 7 to 10 million electric vehicles to be registered in the country by the end of this decade. In January, Reuters, citing the German road traffic authority, announced that sales of battery-electric vehicles in 2020 were over 194,000, which is a three-fold increase.

By and large, the EU executive, the European Commission, wants to have at least 30 million zero-emission cars on the road by 2030 as part of its “Strategy for Sustainable and Intelligent Mobility”.

According to the International Energy Agency, around 3 million new electric cars were registered last year, a record amount and an increase of 41% from 2019.

Oliver Falck, Director of the Ifo Center for Industrial Organization and New Technologies, wanted to highlight the systemic change that is already taking place.

“The development of the production figures already shows that completely different parts are required for electric cars than for internal combustion engines,” he said, noting that “this transformation has not yet manifested itself to the same extent in the number of employees.”

“The transformation that can be expected in the number of employees will not be fully cushioned by the retirement of the baby boomers,” he said. “Since companies are already aware of this gap, they have the opportunity to take appropriate measures such as retraining and further training in good time.”

According to Reuters, the Ifo survey “did not take into account the potential creation of new jobs in the manufacture of electric vehicles or in the production of battery cells”.