Suppliers Will Bear the Brunt
The losses are being driven by the shift from combustion engines to electric vehicles. Electric cars require fewer parts, while many components used in conventional drivetrains disappear altogether or become much simpler.
That leaves suppliers particularly exposed. For decades, many companies have built their businesses around engines, transmissions, exhaust systems, fuel-injection systems and specialized mechanical components. Demand is now shrinking in precisely those areas.
The transition will also create jobs, but not necessarily in Europe. Industry representatives point to poor business conditions and declining international competitiveness. Investment and employment therefore often flow to countries where energy costs, regulation, subsidies and the pace of investment are more favorable.
For Europe, this poses a twofold threat. Its established industrial base is eroding, while too many of the technologies that will shape the industry’s future are being developed and produced elsewhere.
Germany Is Already Shedding Auto Jobs
The trend is clearly visible in Germany. The German Association of the Automotive Industry warned in May that a further 125,000 jobs could be lost by 2035.
According to the Federal Statistical Office, the sector employed 50,000 fewer people than a year earlier, a decline of 6.3%. Employment has fallen to its lowest level since 2011.
Several manufacturers are preparing cost-cutting programs. BMW and Porsche have announced talks with works councils over job cuts. Volkswagen is reportedly weighing cuts affecting around 100,000 positions worldwide, while four plants in Germany could also face closure.
The automotive industry was long the engine room of German prosperity. It provided well-paid industrial work, sustained entire regions, drove exports and supported a vast network of suppliers, engineering companies and service providers.
The shift to electric drivetrains is now reaching the core of Germany’s industrial system. The Fraunhofer study shows how high the price could be: 726,000 jobs at risk across Europe by 2040. In Germany, the losses are already mounting.
