New study: e-cars cost Germany by 2035 more than 100,000 jobs

If it still needed a document, how quickly and comprehensively the car industry will change, Volkswagen delivered it three weeks ago: the group wants to invest 30 billion euros in e-cars by 2023 alone. Although currently only one in every 1,000 cars on German roads is electrically powered, even new sales are only seven out of 1000. But these shares will soon increase significantly.

This development will be felt not only on the roads, but also on the labor market, and in a negative sense: even if the share of electric cars only increases to 23 percent by 2035, net employment will be reduced to just under 114,000, for simple ones Help activities as well as for highly qualified specialists. This is the result of a complex calculation published by the Institute for Employment Research (IAB).

The economy will also be slightly slowed down: Germany's economic output in 2035 - converted to the current price level - will be more than 20 billion euros or 0.6 percentage points lower than it would be without the trend towards the e-car.

More recently, the potential impact of the e-car trend on jobs has been investigated several times. The results vary widely, from high job losses to job gains in the economy as a whole. However, many of these studies were rather rough estimates or merely isolated, looking at the effects in individual areas such as engine production.

However, the IAB has now compiled the impact comprehensively and in detail - for example, for various sectors from the automotive industry itself to the hospitality industry, but also for various occupations or qualification levels. Background is the function of the IAB as a research institution of the Federal Employment Agency (BA). The BA depends on knowing the impact of new technologies on the labor market in as much detail as possible in advance. In this way, the authority can be prepared for how many people with which qualifications and in which sectors could become unemployed, for example, in order to be able to offer suitable retraining.

Relatively optimistic assumptions

The IAB experts therefore fed their assumptions into many assumptions, not only on obvious factors such as the market share of e-cars or the development of charging station infrastructure, but also on less obvious factors such as the need for training or chemical products.

Overall, the study for the year 2035 simulates a situation that is still relatively optimistic from the perspective of the German automotive industry:

• The proportion of e-cars in the scenario only increases to 23 percent , the total number of cars sold remains roughly the same.
• In addition, the experts assume that German carmakers will be able to catch up with electric mobility and will also be as successful with e-cars as they currently do with cars with internal combustion engines, both on the German market and abroad.
• However, with the batteries they would have to import an important component almost completely from abroad .
• The researchers studied only the effect of the increasing share of electrically powered cars - but did not consider possibly also increasing proportions of vans, small trucks or trucks.

Under these conditions, according to the study, more jobs will be created in the short term and the economy will be boosted. This is mainly due to the high investment, not only by the carmaker itself in the new technology and manufacturing, but also in the infrastructure - for example, for the expansion of the network of charging stations, but also for power plants and smart grids that meet the specific needs adapted by electric cars.

The bottom line is that 39,000 new jobs have been added this year, compared to 47,000 next year. Mainly these jobs are not created by the car manufacturers themselves, but rather in mechanical engineering or in the IT industry.

However, this positive trend will soon reverse, according to the study. As early as 2022, the e-car trend will result in a net loss of 4,000 jobs, which will increase in the following years.

The graph shows the net gains and losses of jobs in individual - selected - industries. (For a complete list of affected industries, see the IAB study on page 40.)

At the same time, the jobs will not only disappear in the automotive industry itself. For example, the hospitality industry or the insurance industry are also affected. In a few other industries, on the other hand, net additional jobs will be created over the long term, such as in construction or energy supply. But the bottom line is not enough to make up for job losses elsewhere.

And this time, not particularly low-skilled workers would be threatened with job losses. According to the IAB study, far more jobs would be lost to skilled workers, specialists and even experts than to helper activities. In relative terms, the number of jobs for highly qualified workers is shrinking by around 0.3 percent, and for the low-skilled and skilled workers by 0.2 percent.

But it does not have to be that way. According to the authors, the loss of jobs and economic output could also be significantly higher - namely, if the share of electric cars increases much more than expected. On the other hand, it is even possible that more jobs will be created over the long term and that the economy will grow faster. But for the battery production would have to take place in Germany itself and the carmaker can increase their market share.