Volkswagen wants to accelerate its transition to electric cars to be able to compete with Tesla

By one estimate, 100,000 jobs could be lost in the German car industry by 2025 as a result of electrification.

Volkswagen CEO Herbert Diess told a September board meeting that the company could lose 30,000 jobs if the transition to electric vehicles proves too slow, two sources with knowledge of the matter told Reuters on Wednesday.

Competition from new entrants to the German market, such as Tesla, has pushed the company to accelerate its transformation, Diess told attendees.

The US electric vehicle maker plans to produce 500,000 cars a year in Germany with 12,000 employees, while Volkswagen’s 25,000 produce just 700,000 units at its Wolfsburg plant.

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A company spokesperson confirmed Diess’s view that the presence of Tesla and others in Germany increases the urgency of the transition to electric vehicles, but he 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 Wolfsburg plant in light of new entrants to the market,” Volkswagen spokesman Michael Manske said, pointing to Tesla and new Chinese automakers venturing into Europe.

“Tesla is setting new standards for productivity and scale at Grünheide,” he said, referring to a factory under construction near Berlin that at full capacity will produce between 5,000 and 10,000 cars a week, more than twice the German production of vehicles. electric batteries in 2020.

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A spokesman for the Volkswagen workers council did not want to confirm whether Diess had made the remarks, but said that “a reduction of 30,000 jobs is absurd and without foundation.”

Another representative of the Lower Saxony region union, Volkswagen’s second largest shareholder, said that such level of cuts is “out of place.”

Electric vehicles have far fewer parts than a car with an internal combustion engine and therefore require fewer workers to manufacture. By one estimate, 100,000 jobs could be lost in the German car industry by 2025 as a result of electrification.

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