Although the electric vehicle (“EV’) sector currently makes up a small percentage of total vehicle sales, it is poised to experience exponential growth over the next couple of decades. Several countries around the world have pledged to cut emissions from vehicular transport by steadily replacing the internal combustion engine (“ICE”) vehicles on their roads with zero-emission electric cars. But as EV startup companies and established automakers prepare their facilities in readiness for ramped-up EV production, there have been increasing fears about low-skilled factory workers losing their jobs.
After all, electric vehicles have fewer components compared to conventional vehicles, and as Volkswagen CEO Herbert Diess predicted two years ago, EVs will require 30% less labor. For the roughly 135,000 Americans who make engines and transmissions, this prediction, coupled with the increased push to electrification, probably spells doom.
Sandy Munro, a manufacturing guru at Munro and Associates, says that the internal combustion engines in conventional cars require a ton of parts and plenty of labor to develop while EV motors call for smaller factories and fewer workers. The group of workers whose employment status may be threatened by the influx of EVs makes up around 20% of auto laborers.
However, based on the number of car companies preparing to start EV production and their future plans, these employees have nothing to worry about. General Motors, for instance, has already started building the Hummer EV, Chevrolet Silvadaro electric pickup and the Cruise Origin autonomous shuttle at its once-inactive Detroit-Hamtramck plant.
The plant had 1,200 workers in 2019 when it nearly shut down, and it will double its staff in the next two years. GM plans on investing a whopping $35 billion through 2025 to build 30 new EVs, and by 2030, it will have 50 vehicle models on offer, with one-half of them being battery powered. The Michigan-based carmaker will definitely need assembly workers to achieve its lofty goals.
A partnership between Ford and South Korean battery maker SK Innovation will also provide lots of employment opportunities. The two firms plan on building a trio of battery factories and an assembly plant in the United States, creating 11,000 new jobs. Ultium Cells LLC, a joint venture involving General Motors, has also partnered with LG Chem to build four battery plants, each capable of hiring 1,200 workers. Since the EV battery segment is still quite new, GM has partnered with Youngstown State University to look for and train new workers to make battery cells, while Ultium doesn’t even have experience as an employment requirement.
Over the next couple of decades, established automakers will manufacture EVs as well as ICE cars and they will need workers to build both kinds of cars. Furthermore, we will see an influx of battery plants around the country to keep up with the demand for EV batteries. Employees who are currently worried about their future work status will likely find that the demand for labor surpasses the supply by a wide margin, especially with proven companies such as Tesla Inc. (NASDAQ: TSLA) leading the charge of innovation in this nascent industry.
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