The electric car has become so common that will that will could cost 3 million auto industry jobs inside next three to all 5 years, according to a prominent analyst.
Morgan Stanley’s Adam Jonas said in a research note Friday that will the auto industry is usually going to see serious, widespread improvements to its labor force. Jonas said electric vehicle production will lead to heavy workforce cuts as companies like Elon Musk’s Tesla push big automakers to make them part of the mainstream.
“As auto companies shift production towards electric vehicles, we expect increased pressure on a 100-year-old auto ecosystem supporting millions of jobs globally…representing a risk to labor relations, earnings in addition to the balance sheet,” he said.
Jonas earned a wide following on Wall Street for his early calls on Tesla, as well as his thoughts on electric vehicles. He recently has begun highlighting how electric vehicle start-ups are challenging automakers by transforming the way cars are made.
Morgan Stanley estimates that will the global auto supply chain employs “inside range of 11 million people.” Jonas pointed to recent statements by VW Group CEO Herbert Diess, who said that will takes 30 percent less labor to produce an electric vehicle than a similarly priced car that will has the traditional internal combustion engine. This particular would likely result in a headcount cut of more than 3 million workers coming from the global auto industry.
however that will number could increase, Jonas said.
Jonas said tech start-ups like Tesla in addition to Rivian could build electric vehicles at “a 50 percent reduction in direct labor … or more.” that will would likely reduce the global auto supply chain labor force even further. Even at just a 30 percent cut, Jonas estimates the labor force reduction would likely cost automakers “collectively in addition to over time upwards of” $60 billion.
Maintenance in addition to servicing for electric vehicles is usually less expensive than traditional cars, another consideration in terms of the labor force needed as the switch to the newer cars continues.