Impact on labour of the electrification of vehicles: new reports from Canada and Europe

By Elizabeth Perry - Work and Climate Change Report, August 31, 2021

In late August, the Pembina Institute released Taking Charge: How Ontario can create jobs and benefits in the electric vehicle economy, discussing the economic and job creation potential for Canada’s main vehicle manufacturing province. The report considers manufacturing, maintenance, and the development and installation of charging infrastructure. Its modeling estimates that, “if Ontario were to grow its EV market to account for 100% of total light-duty automobile sales as of 2035, direct, indirect and induced economic benefits associated with EV manufacturing would include over 24,200 jobs, and over $3.4 billion in GDP in 2035. In this scenario, Ontario’s EV charger and maintenance sectors can additionally benefit from nearly 23,200 jobs, and over $2.7 billion in GDP in 2035.”

The report concludes with seven policy recommendations which centre on stimulating consumer demand and encouraging private capital to invest in electric vehicles and infrastructure, and which include the establishment of an Ontario Transportation Electrification Council. Such a council is seen as a coordinating body for “the departments responsible for transportation, economic development, energy, natural resources, and environment as well as labour, training, and skills development.”

Taking Charge includes a short discussion of the impacts on labour, relying largely on the analysis by the Boston Consulting Group, published in September 2020 as Shifting Gears in Auto Manufacturing. That report states that the labour requirements to assemble Battery Electric Vehicles and Internal Combustion Engine Vehicles are comparable — with the example of such tasks as fuel-tank installation and engine wiring shifting to battery alignment and charging-unit installation during vehicle assembly. However, the report sees a likely shift from assembly work to parts suppliers, in the likely event that automakers choose not to manufacture batteries in-house. In that scenario, The Boston Consulting Group analysis forecasts that labour hours would be reduced by 4%. The Pembina discussion concludes with: 

“To maximize the potential for the shift to electrification to contribute to a just transition for autoworkers, policymakers should keep in mind changes in labour and skills requirements within the value chain, as well as the importance of keeping as much of the EV supply chain within the province as possible.”

In Europe: The new Fit for 55 legislative proposals introduced on July 14, if approved, will mandate that vehicles’ average emissions are reduced by 55 percent in 2030 and 100 percent in 2035. Several publications have followed, including: a Clean Energy Wire Fact Sheet, “How many jobs are at risk from the shift to electric vehicles?”, which concludes that there is greater risk of job loss amongst the supply chain manufacturers than at the big assemblers such as VW Group (Volkswagen, Audi, Porsche, Skoda and Seat brands), Stellantis (Fiat, Peugeot, Citroen, Opel/Vauxhall), the Renault Group, BMW and Daimler (Mercedes).

Trade magazine Automotive Logistics published “Electrifying Europe: EU ‘Fit for 55’ legislation will transform the automotive supply chain” on August 23(restricted access), emphasizing that the new policy would “completely transform” the industry.

The European Automobile Manufacturers’ Association (ACEA) published Making the transition to zero-emission mobility: Enabling factors for alternatively-powered cars and vans in the European Union , a thorough analysis of the entire supply chain. And following an “auto summit” in August, involving industry, unions, and senior German government officials including Chancellor Angela Merkel, the details of a “future fund” of one billion euros by 2025 were revealed, as summarized in “Billions in taxes for e-mobility” (Aug. 18). Despite this support for the manufacturers, concerns remain regarding the capacity of charging infrastructure – summarized in “The loading chaos remains even after the car summit: More electric cars, too few charging stations” (Aug. 20).

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author.