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How Many Jobs Will Disappear With Switch To Electric Cars?

When considering the transition from gasoline and diesel-powered vehicles to electric, it is easy to see the disruption this will bring to the auto industry, where fewer workers are required to construct an electrical motor than a fossil fuel powered engine. But it goes further than that. We won’t need people (or machines) who make exhaust pipes, mufflers, petrol tanks, and many other bits and pieces.

But it goes even further than that. A recent dataset revealed that of the 4.7 million people employed in the making, selling, and servicing of motor vehicles in the USA, 1.3 million are employed by dealerships, a million are in gas stations, 900,000 in motor vehicle and parts manufacturing, and a further 880,000 in repairs. For every person employed to make your car, 1.5 people are employed to sell it to you and service it. For starters, that should tell us something about the desirability of ICE (internal combustion engine) cars. 

So, let’s zero in on the dealerships. Not sure how many of the people employed are sales people and how many do the servicing, but they should both be looking at their long-term career options. Some of the most popular cars are now available online, not just Tesla and Rivian vehicles — VW and Hyundai are also heading in this direction. 

Despite the fact that electric cars need very little servicing, some dealers are still offering service contracts. These are not cheap. In the early days, Tesla did this too. I remember being offered a service contract for a Model S when I test drove one back in 2014. They suggested I pay for the peace of mind. A friend of mine just got his Ioniq serviced (a warranty requirement, he was told). He’s not sure what they did, but the invoice included a charge for oil. … It won’t be long before EV drivers realise they don’t need scheduled servicing like they did with an ICE car — it was always about the oil.

A recent brochure from Kia quotes a fee of $3000 for servicing over 7 years (at 15,000 km intervals). My Tesla Model 3 SR + has done 60,000 km and hasn’t had any regular service yet. We’ve replaced two tyres, had a stone chip in the windscreen replaced and some other warranty work done, but none of the servicing we would have done on a gas car.

So, dealerships might not need the level of staff they do now — especially if dealers don’t know anything about electric cars and refuse to sell them. I have had this experience. The ones I feel sorry for are the small town father & son mechanics workshops. 

Suburban gas stations may revert to being highly expensive corner shops — people popping in because they have run out of milk. But not for energy. We get that at home. Where are the retraining programs for all these people who will soon be looking for work? Watchmakers, typewriter mechanics, stable hands, stokers, and shorthand typists know what I am talking about. I am afraid that they don’t exist yet. They may soon do so as this part of the labour market contracts. 

As for the car salesmen, there will be lots of used cars for sale, so they should be okay.

Source: Bloomberg

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David Waterworth is a retired teacher who divides his time between looking after his grandchildren and trying to make sure they have a planet to live on. He is long on Tesla [NASDAQ:TSLA].


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