The state premier of Lower Saxony, home of Volkswagen, says he would not tolerate a large-scale reduction in staff at Germany’s largest carmaker. There is talk of axing 30,000 VW jobs nationwide, though messages have been mixed. Benjamin Wehrmann and Sören Amelang at Clean Energy Wire look at the latest news, then summarise the implications of the EV transition for the auto industry across Europe. Highlights include the observation that a Tesla employee in Germany produces 4 cars for every 3 by a VW worker. Although carmakers will face big upheavals in retraining and redundancies, the smaller specialised suppliers (spark plugs, fuel injection systems, exhaust systems, gearboxes, fuel tanks, etc.) will face far greater challenges. Across Europe, a sizeable 3.7m are employed directly and indirectly in car manufacturing. The authors break down the numbers by sub-sector, and by nation with the biggest employers being Germany, France, Poland, Romania, the Czech Republic, Italy, UK, Spain and Hungary.
The home state of Volkswagen, Lower Saxony, would not tolerate a large-scale reduction in staff at Germany’s largest carmaker, state premier Stephan Weil (SPD) said in an interview with newspaper Die Welt. “Such an approach would not be possible in Lower Saxony,” Weil told the newspaper in response to media reports that Volkswagen plans to axe up to 30,000 jobs due to restructuring required by the transition to electric vehicles.
Lower Saxony is a major shareholder in Volkswagen and can thus directly influence the company’s management decisions. Weil added that the carmaker had already said it did not consider job cuts at this scale. “Volkswagen is in a relatively comfortable position because the restructuring process was initiated earlier than at some competitors,” he said, arguing that the company and the state would continue to coordinate efforts in the technological shift to ensure an orderly transition.
Mixed messages
According to a report carried by business newspaper Handelsblatt, Volkswagen CEO Herbert Diess had told the company’s board that tens of thousands of jobs are at stake if Volkswagen does not manage to accelerate its shift to e-cars. Diess reportedly said that stiff competition on the e-car market, especially by US carmaker Tesla, which plans to produce up to half a million vehicles per year at its new gigafactory plant near Berlin, would command tough decisions.
Tesla makes far more cars per employee
According to news agency Reuters, Tesla plans to build 500,000 cars per year with only 12,000 employees at its German factory, whereas Volkswagen produces 700,000 cars with 25,000 employees at its main plant in Wolfsburg in Lower Saxony. “Tesla is setting new standards for productivity and scale,” a Volkswagen spokesperson told Reuters, adding that “no concrete scenarios” for how the German company plans to respond have been drawn up. In a separate article, Handelsblatt reported that Diess had invited Tesla CEO Elon Musk to speak at a manager meeting in Austria, where the Volkswagen head told Musk he would soon visit the new Tesla factory.
Suppliers face an even greater challenge
The shift to electric cars has led to worries in Germany’s famed car industry that many jobs could be lost, as combustion engine vehicles are replaced with battery-driven cars. While brands of the Volkswagen Group, Mercedes and BMW all have announced far-reaching plans to restructure their production, smaller producers that supply the combustion engine industry could face much greater difficulties in weathering the shift to electric mobility.
European overview: the EV transition
The impact on Europe’s economy will be substantial, as millions of people currently earn a living by producing conventional cars and their components. Many of them will have to retrain to adapt to new roles in the production of electric vehicles. Others will lose their jobs, while low-emission mobility offers entirely new job opportunities in the industry, such as battery production.
Europe currently produces 25 percent of all passenger cars and 19 percent of commercial vehicles worldwide, according to the European car industry federation ACEA. The region boasts global car giants like the VW Group (which includes the Volkswagen, Audi, Porsche, Skoda and Seat brands), Stellantis (Fiat, Peugeot, Citroen, Opel/Vauxhall), the Renault Group, BMW and Daimler (Mercedes). These companies are often in the spotlight when it comes to the effects of electrification, but recent evidence suggests that the carmakers will manage the shift to electric mobility with fewer job losses than originally feared.
Europe’s massive supplier industry looks set to be more heavily affected, as many smaller companies depend on making parts for combustion engines that will no longer be needed in electric cars – for example spark plugs, fuel injection systems, exhaust systems, gearboxes or fuel tanks. These companies will find it particularly difficult to switch to alternative products.
The size of the problem
ACEA says that almost 14.6 million people work “directly or indirectly in the auto industry,” accounting for 6.7 percent of all EU jobs. But in this figure the lobby group includes jobs at car rentals, petrol stations, road construction, truck drivers and many others that will not be affected by the switch to e-mobility.
Based on data from Europe’s statistics office Eurostat, ACEA says that the automotive industry provides some 3.7 million manufacturing jobs – 11.5 percent of all such jobs in the EU. Currently 2.7 million people are directly employed in manufacturing in the automotive industry, corresponding to 8.5 percent of total EU manufacturing employment.

Graphic by ACEA
Regional concentration
The region’s car industry is concentrated around central and eastern Europe, as illustrated by the following map that includes assembly plants (black) and suppliers (orange).

Graphic by Federal Reserve Bank of Chicago
Total direct automotive manufacturing employment is highest in Germany by far with around 882,000 jobs, followed by France (229,000), Poland (214,000), Romania (191,000), the Czech Republic (181,000), Italy (176,000), United Kingdom (166,000), Spain (163,000) and Hungary (102,000), according to ACEA figures.
Given their relatively smaller total population, the share of direct automotive employment in total manufacturing is highest in Slovakia and Romania with almost 16 percent each, followed by Sweden, the Czech Republic, Hungary and Germany, with the EU average standing at 8.5 percent.

Graphic by ACEA
Eastern Europe
Many large automotive players – both carmakers and suppliers – use eastern Europe as extended workbenches given the relatively lower wages there. For example, in the Czech Republic this trend has made the automotive industry the biggest industrial sector that accounts for more than nine percent of GDP, 26 percent of manufacturing and 24 percent of Czech exports, according to the country’s business and investment development agency Czechinvest. Many foreign car industry investors produce in the country, as illustrated by the following map.

Graphic by Czechinvest
Suppliers more vulnerable than carmakers
Media coverage of the upheaval in the car industry has largely focused on the embattled carmakers. But it appears likely that the continent’s massive supplier industry will be the focus of projected changes to employment because many companies – especially smaller ones, which are often extremely specialised – have much less scope to adapt. In total, the supplier industry also employs more people than the carmakers themselves.
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Benjamin Wehrmann is a staff Correspondent for Clean Energy Wire
Sören Amelang is a staff Correspondent for Clean Energy Wire
The article and abridged factsheet are published under a “Creative Commons Attribution 4.0 International Licence (CC BY 4.0)”
Automative use should go down and public transport particularly lower cost steel wheel trams should increase (carmakers retool). A low cost cheap electric peoples car (at near cost) should be mandatory in each car makers range of products. Electric car subsidies should be graduated such that oversized SUVs, over heavy and fast models receive little to no subsidy.
The Ultra Light Tram (modern light weight streetcars – less services diversion needed) initiative with quick to install prefabricated rail track in slots in bitumen eg. LR55, and battery/supercap with at stop charging and some OHL can lower the cost of trams for small to mid sized towns.
Trams become the backbone of public transport, integrated with electric bus’s. Co-op car share for occasional use, Zurich/Ghent type public transport zoning in favour of transit, bicycles, and scooters.