Volkswagen ceo Herbert Diess said on Tuesday that the brand could face 14,000 job losses by 2020 because of the switch to electric cars.
During an auto suppliers conference in Wolfsburg, Diess said the new demands to reduce CO2 emissions across brands’ ranges could see the brand having to meet a target of one in every three vehicles sold being electrified.
Earlier this month the European Parliament said it wanted to cut CO2 emissions from new cars by
If that was the case, the VW boss said electric vehicles would have to count for half of sales.
German car makers at threat: VW boss Herbert Diess has said that premium car makers – like Volkswagen, BMW and Daimler – could pay the biggest penalty due to changes to emissions rules
The Volkswagen boss said that stricter emissions standard would see German premium-car makers have just a 50 per cent chance of surviving as leading players in the auto industry unless they transform their businesses to meet the new regulations and adapt supply chains.
Car manufacturers have complained increasingly loudly about new regulations, including bans on older diesel vehicles in German cities and broader EU measures to cut car emissions, saying they will hurt Europe’s car industry and cost jobs.
‘If you look at the former bastions of the auto industry like Detroit, Oxford-Cowley or Turin, you understand what happens to cities when once powerful corporations and leading industries falter,’ Diess said, according to Reuters.
‘From today’s point of view the chances are perhaps 50-50 that the German auto industry will still belong among the global elite in 10 years’ time.’
Germany’s BMW, Audi, Mercedes brands command around 90 per cent market share in the premium auto segment. An intensifying push to cut emissions hurts high horsepower vehicles and therefore German brands in particular.
‘We are all used to the fact that we have flourishing industrial metropolises around the central manufacturing plants of German carmakers and their suppliers, places where people like to live and work, but that’s not guaranteed for eternity,’ Diess added.
Diess said he believed there was a 50-50 chance that the German auto industry will still belong among the global elite in 10 years’ time because of the demands to switch to greener vehicles
To cut average fleet emissions of carbon dioxide in Europe by 30 per cent by 2030, Volkswagen needed to raise its share of electric vehicles to almost a third of all new new cars it sells, the VW boss estimated.
A reduction of 40 per cent CO2 fleet emissions would require around half of the new cars sold to be fully electric.
The shift from combustion engines to electric cars would also cost 14,000 jobs at VW by 2020, Diess said, requiring an overhaul of the carmaker’s in-house components business.
It is clear to us all that the structural shift will lead to fewer auto industry jobs in Germany. The question is, how quickly do we need to implement this structural change,’ he said.
VW is overhauling its in-house components division, which eats up the lions share of the 170 billion euros (£150 billion) spent on procurement, develops and builds car parts at 56 sites across the globe, and employs about 80,000 people.
‘From Jan. 1 onward, Volkswagen components will act as an economically independent entity,’ Diess said.
Each of the 56 plants would be free to evaluate partnerships and even to build components for other carmakers, he added.