Cars

The electric car revolution will leave many behind

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This has been another big week for electric cars, which means it has been a frantic week for people who loathe the things. First they had to deal with the UK banning new petrol and diesel car sales from 2040 — just three weeks after France announced a similar plan.

Then they have had to gird themselves for the frenzy due later today when Elon Musk presides over the live-streamed first deliveries of the Model 3, his Tesla company’s electric car for the masses. All this in the same month that Volvo said all its cars would have an electric motor from 2019.

“Crazy” was the word that jumped out from the email that arrived in my inbox on Wednesday from the Global Warming Policy Foundation, a UK think-tank that rarely sees a climate change policy it likes.

When it comes to electric cars, there is no end to what the foundation’s followers think is crazy: the high price tags, the lavish subsidies, the swelling mounds of used battery waste.

This time they had a newer worry: the power stations that may have to be built to “cope with the electric revolution”. They have a point.

There were only 2m electric cars on the world’s roads last year, well below 1 per cent of the global total. But with annual sales soaring and most top carmakers planning new electric models, no one expects those numbers to stay still. The International Energy Agency thinks there could be up to 20m electric cars by 2020 and maybe 70m by 2025. That’s brilliant news for anyone worried about climate change and air pollution. But it does require more thought about matters such as safely mining raw materials for batteries and possibly extra power plants, though not the vast numbers electric-car critics like to cite.

Climate change sceptics typically exaggerate these issues. They can also be fantastic hypocrites, coming over all tree-huggerish about toxic battery waste when no other environmental threat ever bothers them.

Curiously, they don’t spend so much time on one of the great economic and political risks posed by the rise of the electric car: its potential to be a jobs killer.

The auto industry is fond of saying that if it were a country, it would be one of the world’s largest economies. Its figures show it supports around 7m jobs in the US alone and close to 13m in Europe.

Robots may have encroached on the assembly line already, but wait until the beguilingly deceptive electric car takes off. It might look like any other car from the outside but inside, it is more like a computer on wheels, a very different beast to the internal combustion engine vehicles we drive today. You can get a sense of the disparity from a recent report by some enterprising UBS financial analysts, who tore apart one of GM’s $37,000 Chevrolet Bolt electric cars to see what it cost to make. They found it was $4,600 cheaper to produce than expected and concluded that, with further cost falls likely, electric cars would probably disrupt the industry faster than widely understood.

The report did not dwell on jobs but for an auto worker, its findings are frightening. It said the Bolt had just 24 moving parts compared with 149 in a VW Golf, mainly because electric motors are so much simpler than combustion engines.

That suggests the car industry of the future will need far fewer people to make not just vehicles, but the components that go into them.

There is also the auto repair and service market. Combustion engines have spark plugs and oil that need changing. Electric motors do not require anything like the same amount of maintenance.

It is hard to know exactly what this will mean for the world’s car workers, not all of whom will switch easily from doing an oil change to rebooting a car computer.

Obviously a growing electric car industry should create new jobs in companies that make, say, batteries or software. But an awful lot of people may be left behind. If you talk to people who spend time looking at this, you hear alarming figures. One analyst I spoke to this year said he thought the reason some executives in older car companies were initially reluctant to embrace electric cars was because they understood the implications for their huge workforces. More than 420,000 auto jobs in Germany could be imperilled by a 2030 ban on combustion engine cars being debated there, a study commissioned by the country’s car industry said last week.

All this speaks to a problem about the shift to a greener energy system that is well understood by those who study it closely but yet to attract nearly enough attention from politicians: the need to retrain and possibly compensate workers at the face of rapid industrial change.

There is no point blaming green campaigners who lobby for lower carbon emissions or warn about the risk of stranded financial assets in oil and coal companies.

Those are real dangers. But as the political ructions in Donald Trump’s America have shown, much more needs to be done to address stranded human assets as well.

pilita.clark@ft.com

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