Will the electric car switch trigger motor industry unemployment?

Irish motor trade is sanguine for now, but the broader industry is braced for a jobs shock from electric vehicles

Crack open the bonnet of a Mercedes-AMG model, or maybe an Aston Martin. You will, of course, find an engine – most likely a hulking great V8, or if you’re very lucky a vast V12. An engine that hollers and screams with the vocal dexterity of Kiri Te Kanawa, and which can propel the car that holds it forward with the venom of a striking Cobra.

It’s also an engine that has been built by someone. Some people, actually, as there is more than one involved in making each engine, but in the case of an AMG or Aston model, the final construction and sign-off of each engine is done by one person, whose signature is then etched into a plaque on top of the cam covers. It’s a wonderful, personal, touch and a throwback to an era when cars really were hand-made and hand-finished.

It’s also going to be phased out. Maybe not, as Bogart would have it, today and maybe not tomorrow, but soon. An engine, certainly a complex one like a Mercedes-Benz V8, will have maybe 1,200 separate components within its structure. A mixture of steel, aluminium, titanium, plastic, and maybe a smattering of iron and carbon-fibre. All of which has to be designed, fabricated, built in bulk, assembled, and inspected. It’s part of why cars are so expensive – there’s a veritable army of skilled human beings in the design, supply, and construction chain behind them. It’s also, arguably, why cars are so emotive. Even in an era of mass production, they require a distinctly human touch to create them.

That's ending, though. An electric motor and the single reduction gear it requires for a transmission has maybe 24 separate parts. They can be made in bulk, with relative ease, and few if any car makers will bring their construction in-house. They will be made by anonymous suppliers based in faceless, grey buildings in bland industrial estates. The batteries tell a similar story. Made largely by the likes of Panasonic, LG Chem, Samsung, and China's CATL, the batteries will be made in huge, sprawling plants largely located in Asia.

It's a far cry from men in oil-stained brown overalls delicately assembling a Ferrari V12 or a Porsche flat-six. Or even a Ford 1.6 twin-cam. In an emotive sense, there's little to nothing about electric motors to excite the senses. And, increasingly, little about them that will be good for employment.

"Auto manufacturers are eager to move as fast as they can towards zero-emission vehicles," says Erik Jonnaert, secretary general of the ACEA, the umbrella body that represents the European car industry. "However, the entire European automotive supply chain will need to transform at a pace which is manageable, protecting employment and the long-term viability of the sector. This makes it clear that overly stringent CO2 targets, as well as unrealistic sales quota for battery electric vehicles, the so-called 'benchmarks', could lead to serious structural problems across the EU."

By structural problems, Jonnaert means unemployment. According to a report by UBS Bank, and quoted by the ACEA, the arrival of mass electrification will mean that carmakers themselves will need to produce around 17 per cent fewer parts and components. In the back-end supply chain, the story is even bleaker – UBS expects a reduction of 38 per cent in the number of parts and components needed.

According to the ACEA: "Today, the auto industry accounts for more than 11 per cent of total EU manufacturing employment. In 14 regions across the EU – concentrated in the Czech Republic, Germany, Italy, Slovakia, Hungary, Romania, Sweden and the United Kingdom – the automotive sector even accounts for more than 20 per cent of total manufacturing employment. A forced push to electric cars will disproportionately affect jobs in these regions."

It’s not just in the factory that jobs may be lost. Dealerships rely on servicing and maintenance custom for as much as 44 per cent of their income (according to Forbes) and the simple fact is that electric cars are . . . well, simpler. They have a tiny fraction of the moving parts of a petrol, diesel, or hybrid car and so require shorter, and fewer, services. On top of which, electric car makers are leading the charge away from the traditional big-glass-palace dealerships with their expansive staffing levels. Electric car firms – led by Tesla and Volvo’s all-electric spinoff Polestar – are keener on using small, but upscale, stores in city centres of big shopping malls. Again, that means fewer staff, and lower employment.

Right now, the Society of the Irish Motor Industry (Simi) doesn't foresee a huge problem. Simi director general Brian Cooke says: "While car retailers premises may have changed over time, the principle of the car retailer remains the same, to sell cars to consumers. The franchise structure, which the industry and legislators have favoured for many years, is still likely to be the structure for the foreseeable future, with issues around both the cost of city centre sites and planning permissions likely to be a deterrent in the establishment of such premises in the short term."

On broader employment prospects, Cooke played up the fact that there are still, and will continue to be, many internal-combustion engined cars on the road. "There are over 2.5 million vehicles in Ireland, and there will continue to be a large number of ICE [internal-combustion engined] vehicles in the Irish fleet, even beyond the next 10 years" says Cooke.

“The change to an electric fleet, while accelerating each year, will be gradual, which will allow the professional Industry plan the future strategically. The industry, which currently provides over 42,000 jobs in Ireland, will continue to be a strong employer across the country even in an electric future.”

Others are less sanguine about the future. IG Metall, the huge union that represents Germany’s automotive workers, reckons that by 2030 75,000 jobs, out of around 210,000, will be gone. Electrification, in the same period, is only expected to claw back some 25,000 jobs.

Even the environmental lobbyists who have pushed hard for the adoption of electric cars are worried. Eco think-tank Transport & Environment says "the biggest short term risk is that European manufacturers have bet on the wrong technology in diesel and could shortly face new competition from China on EVs [electric vehicles]. If sizeable numbers of electric cars are imported into the EU because new manufacturing capacity has been created there, then a quarter of jobs in manufacturing could effectively be off-shored."

Switching to electric power for our cars could well be a key factor in saving the planet, but it seems likely to come with a significant societal cost.