Electrification transformation may lead to 30% layoffs in French auto industry

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According to foreign media reports, a new study shows that as France accelerates its transition to electric vehicles, many parts suppliers are out of date and the French auto industry could lose nearly 1/3 jobs by 2030.

AlixPartners, a US consultancy, was commissioned by La Platforme Automobile, a French car lobby, to conduct a study on France's transition to electric cars. The French auto industry will cut jobs by 15% to 30%, according to the study. Judging from the speed at which electric cars are popularized, this will mean that as many as 52000 people have lost their jobs. Carmakers have cut the most jobs, but jobs in emerging industries such as battery manufacturing are likely to increase, the report said.

The AlixPartners study is the latest pessimistic view of the impact of the transformation of electric vehicles on employment. Deiss (Herbert Diess), chief executive of Volkswagen, has tried to ease tensions with workers in recent weeks after he hinted that massive layoffs might be needed to compete with Tesla. Carlos Tavares, chief executive of Stellantis, also warned that electrification would require a significant increase in productivity.

Alexandre Marian, managing director of AlixPartners in Paris, said the report also applies to other European countries. Marian also said suppliers would feel more pressure to produce equipment such as electric vehicle motors for carmakers.

Other highlights of the report:

1. The study assumes that the proportion of French models in 2030 is 49% for electric vehicles and 21% for plug-in hybrid vehicles.

2. Car production in 2030 will be 10% less than in 2019.

3. The price of electric vehicle parts is about 60% higher than that of internal combustion vehicles, which brings the average cost of each electric vehicle to 24000 euros ($27000).

4. As carmakers increase internal production of some parts such as batteries through joint ventures, the number of car parts supplied by French suppliers will fall by about 11 per cent.