The High Price of Simplicity: Manufacturing of electrovehicles will create an army of unemployed people

Economist Alexander Zelenyuk pointed out the not very pleasant effect of the introduction of electric vehicles instead of the usual cars powered by internal combustion engines in his work, to which journalist Pavel Pryanikov refers in his channel. This effect is often forgotten to be mentioned when advertising a new technology, but it entails a significant change in the infrastructure of the engineering industry, as well as the labor market in it:

“An important question is what to do with a large part of the industry focused on the production of cars with internal combustion engines (ICE)? Take, for example, the BMW M5 gasoline engine, a complex mechanism made up of 1200 parts, 150 of which are movable; this miracle of engineering weighs about 200 kg. Hundreds of hands and a network of hundreds of suppliers are involved in its production. And the 32-kilogram i3 electric car engine, produced at the same BMW plant in Dingolfing (Germany), consists of 50 parts; it does not need a complex transmission, exhaust system and fuel system. Only two dozen people collect it. And the battery packs of an electric vehicle are unified elements that are stamped by robots at many factories and purchased in bulk. The creation of an electric motor takes about 30% less time than a gasoline one.

A study by the German IG Metall found that of the 210,000 people involved in transmission and engine manufacturing, 75,000 in Germany alone will be out of work by 2030, even with the 25,000 vacancies that will be created by electrification. So, in connection with the termination of ICE production at Volkswagen factories in 2026, the company plans to cut at least 30 thousand positions. This will have a significant impact on German suppliers as well. More than 70% of the added value of cars made in Germany comes from them. Several German auto component manufacturers, including Bosch and Schaeffler AG, are already cutting jobs.

In other words, countries with a high share of the automotive sector are facing a very dramatic situation. According to Accenture, in the last decade, the automotive industry accounted for 60% of the revenue growth of the top 50 German companies. And now the fourth largest economy in the world is facing a very serious transformation".