VW CEO Diess warns slow shift to EVs could cost 30,000 jobs, report says

Automotive Industry

Source: Automotive News Europe, 2021-10-13

Volkswagen Group CEO Herbert Diess told a supervisory board meeting in September that the company could lose 30,000 jobs if it transitioned too slowly to full-electric vehicles, two sources with knowledge of the matter told Reuters.

Competition from new entrants to the industry such as Tesla has pushed the company to speed up its transformation, Diess is said to have told attendees.

Tesla plans to produce up to 500,000 cars a year at its new German plant with 12,000 employees. VW employs 25,000 people to build 700,000 cars at its home factory in Wolfsburg.

A VW Spokesman confirmed Diess' position that Tesla and others' presence in Germany heightened the urgency of transitioning to EVs but denied that specific calculations had been made on how many jobs could be lost in the process.

"There is no question that we have to address the competitiveness of our plant in Wolfsburg in view of new market entrants," VW Spokesman Michael Manske said, pointing to Tesla and new Chinese automakers making inroads into Europe.

"Tesla is setting new standards for productivity and scale in Grunheide," he said, referring to Tesla's factory under construction near Berlin which at peak capacity will produce 5,000 to 10,000 cars a week -- more than twice the German battery-electric vehicle production in 2020.

"A debate is now underway and there are already many good ideas. There are no concrete scenarios," Manske said. 

A Spokesperson for VW's workers' council said that while they would not comment on whether Diess made the remarks, "a reduction of 30,000 jobs is absurd and baseless."

Another union Spokesperson from the German state of Lower-Saxony, which is VW's second-largest shareholder, said such cuts were "out of the question."

EVs have far fewer parts than internal combustion engine cars and so require fewer workers to produce. According to one estimate, 100,000 jobs in the German auto industry could be lost by 2025 as a result of electrification.

VW's Wolfsburg plant does not currently make EVs, but the company plans to produce an electric sedan there from 2026 under a plan named "Project Trinity."

Diess has previously said Tesla would fuel competition in Germany.

VW is also considering listing its car charging and energy business in addition to existing IPO plans for its battery division, Chief Technology Officer Thomas Schmall told Manager Magazin in an interview published on 13 October.

Schmall said nothing had been decided yet and it would probably take up to two years before the new companies were established and ready for the stock market.

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