How the Rise of Electric Vehicles Will Lead to Job Losses in the Auto Industry

This article discusses the potential job losses in the auto industry due to the rise of electric vehicles (EVs). EVs have significantly fewer parts than traditional gas-powered vehicles, which means they require less labor to assemble. As a result, the work stoppage caused by strikes at GM, Ford, and Stellantis last week will exacerbate the structural advantage already enjoyed by EV leader Tesla.

The traditional internal combustion engine contains over 1,000 parts, while new electric engines have only about 50. This simplicity in design and assembly leads to fewer jobs in the industry. The Congressional Research Service has noted that while the production of electric vehicle powertrains could generate employment, fewer employees are needed due to the relatively few components and less complicated assembly process of vehicle battery packs compared to internal combustion engines.

Auto executives are aware of the labor cost advantages of EV manufacturing but are hesitant to discuss the potential job losses. Ford CEO Jim Farley and VW’s CEO have acknowledged that building EVs requires significantly less labor compared to gas-powered cars. This cost advantage has given Tesla a headstart in the EV market, and other automakers are now racing to catch up.

The recent strikes in the auto industry could cost GM, Ford, and Stellantis up to $5 billion within 10 days, further exacerbating the structural disadvantage they face. Meanwhile, Tesla, which does not have to deal with the complexities of internal combustion engines, continues to produce EVs efficiently and is even introducing new manufacturing technologies to reduce the number of car parts and increase efficiency.

Overall, the rise of EVs will lead to job losses in the auto industry as the assembly process becomes simpler and more streamlined. While there may be environmental benefits to EVs, the primary driver of adoption is the cost advantage and efficiency in manufacturing.

– Business Insider (Original Article)