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article imagePush for electrification results in auto layoffs

By Tim Sandle     Dec 8, 2019 in Business
With the recent news that Audi is cutting 9,500 jobs and investing the savings in electric vehicle pursuits, Lux Resarch analyst Christopher Robinson sees these activities as an inevitable part of the coming of the electric car.
German car maker Audi will be making 9,500 of its 61,000 workers in Germany redundant between now and 2025in order to make more money available for electric vehicles and digital working practices.
Audi said in a statement: “The company must become lean and fit for the future, which means that some job profiles will no longer be needed and new ones will be created.”
Industry expert Christopher Robinson has taken this recent announcement and assessed overall data relating to automakers cutting spending in other areas to push for electrification.
He tells Digital Journal what’s behind Audi’s recent lay-offs: “Tesla's battery electric vehicle (BEV) success has had the biggest impact on the premium mass-market segment that Audi and BMW have traditionally dominated, where the higher vehicle price points can justify the more expensive electric powertrain.”
He also notes that electric vehicles will inevitably require fewer employees, as: “the simpler design of BEVs requires fewer employees to assemble the vehicles as automakers are put under increasing pressure to sell BEVs – particularly in Europe, where regulations are stricter.”
Gazing to the future, Robinson predicts that: “The industry should expect automakers to cut spending in other areas in order to maintain profits during a push for electrification, much like Daimler did last month when it announced it was refocusing its autonomy efforts on commercial vehicles instead of robotaxis.”
Daimler and Bosch have announced public tests of robotaxis. Both companies entered into a partnership for developing autonomous cars a few months ago. The concept of fleets of robotaxis collecting and ferrying customers around cities is gaining traction, fueled by the rapid growth of ride services such as Uber and of delivery services firms.
At the same time, Daimler has said it would cut more than 1,000 jobs by the end of 2022. The company notes that the growing range of plug-in hybrids and all-electric cars is leading to cost increases.
Also in relation to the German car industry, Mercedes-Benz has announced it has invested a total of more than 100 million euros in the battery production and a plant expansion at a new factory located in the Bangkok region in Thailand.
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