Effects of the Increased Production of Electric Vehicles on Employment in Germany

Tasks

The automotive industry worldwide is undergoing a fundamental transformation process: Conventional vehicles based on burning fossil fuels are to be replaced by low-emission vehicles to significantly reduce CO2 emissions in the transport and traffic sector. Governments in Europe, North America and Asia have set ambitious emission targets for the transport sector, to be achieved through regulation and incentives.
In this study, we empirically analyze the effects of the transformation process for employment in the German automotive industry using data from official statistics. Based on the methodology established in Falck et al. (2017) (https://www.ifo.de/en/publikationen/2017/monograph-authorship/consequenses-potential-ban-new-cars-and-light-trucks), we investigate how the dependency of production, value added and employment on vehicles with combustion engines and the associated parts groups has developed in the period 2015 to 2019.

We develop various scenarios for possible developments up to 2030 and analyze the likely consequences in terms of changes in the employment structure in the industry. We then put the resulting estimates of the decline in employment for parts groups that depend on the combustion engine in relation to the foreseeable age-related employment fluctuation in the industry.