There are bold claims, and then there’s Toyota. Despite many other experts ‘ opinions, the automotive manufacturing company is sticking to their belief that electric vehicles are not the future of the auto industry.
This claim comes straight from the mouth of Toyota CEO Akio Toyoda, who has been very vocal about his discontent with the EV trend. He’s gone on the record to say that electric vehicles will demand huge investments, emit more carbon dioxide and, eventually, kill businesses. He’s gone on record saying,
“When politicians are out there saying, ‘Let’s get rid of all cars using gasoline,’ do they understand this? The current business model of the car industry is going to collapse,” causing the loss of millions of jobs.”
Toyota CEO Akio Toyoda
It’s not that surprising that Toyoda has been so against the idea of electric vehicles since his company has been a long-time champion for hybrid, claiming them as a safe transition towards electrification. Unfortunately, to stay in the auto-trading game, Toyoda and his company will have to get in line.
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Regardless, Toyota’s Gearing Up Their First EV Lineup
Toyoda realizes that to stay relevant in the auto industry, he needed to explore the EV trend. With that, Toyota is gearing up for an upcoming release of their first lineup of electric cars.
The company recently announced their investment of $803 million and 1,400 new jobs in their Princeton car plant in Indiana. They are planning the production of two new electrified SUV models. This is coming off the coattails of their previous announcement in February, when they announced bringing in three new electrified models to the US market this year: two BEVs and one PHEV.
However, not much more details about the plant’s conversion were revealed. With the addition of 1,400 more employees, the plant will hold approximately 8,400 employees and continue to build about 420,000 vehicles per year at total capacity.
According to a Forbes article, Toyota’s first-ever EVs are set to arrive in the US by mid-2022, and there will be 15 new Toyota EVs by 2025. This is quite interesting because, while it’s easy to write Toyoda off as a curmudgeon forced into a new trend, he’s not actually that far off.
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Let’s Go Over This Again
Many have pointed out, including us in a previous blog post, that electric vehicles are not as green as we had hoped. This is not so much from driving them, but the manufacturing and aftermath. It’s been argued that the creation of EVs and battery recycling for when these cars reach their end is just as or more harmful than gas-powered engines.
Not only are some of the ways we generate electricity problematic, but the batteries that power the car leave a significant carbon footprint. So significant that it is barely an improvement over ICE cars. If you want to read more, go here to our previous blog post.
Toyoda does land on some interesting new territory is how these electric cars will affect our current job market. He claims that making the shift to an EV market will put “millions” of jobs at risk. Quite the statement, but he is not far off.
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EV Market vs. Job Market
As the auto industry is starting to shift towards electric vehicles, this is expected to dramatically change the job market. It’s estimated that electric cars are easier to design and engineer, requiring half as many parts and 30% fewer hours to build.
This would mean fewer assembling powertrain components and fewer works for dealership service departments and auto repair shops. EV’s do not require oil changes, meaning less revenue for dealerships and fewer opportunities to interact with customers.
“The number of jobs to produce batteries and electric motors and the power electronics will not be nearly as many as the number of jobs that are used to produce a combustion engine, an exhaust system, an emission control system, a fuel management system, transmissions and drivetrain components. If you play this out in a five- to 10-year time frame, employment ramifications for states like Michigan and regions like southeast Michigan and northwest Ohio are really going to be a big deal.”
Lawrence Burns, previous vice president of research, development and planning at General Motors Co. until 2009, currently advises companies on the future of mobility
The automotive industry is a significant factor in the US labour force, providing millions of middle-income workers with employment. Approximately one million Americans work in motor vehicle and components manufacturing alone. The COVID-19 pandemic alone has sent auto employment down roughly 30% as of May 2020.
Even Ford estimated that “the assembly of EVs could lead to a 50 percent reduction in capital investments and a 30 percent reduction in labour hours compared with ICE manufacturing.”
However, this doesn’t mean that the EV shift won’t create new jobs going forward. This could include manufacturing new component parts—such as batteries, electric motors, and power electronics—and rapidly building new charging infrastructure. Back in 2019, it was estimated that more than 250,000 Americans were employed in the manufacture, sale, repair and maintenance of electric, hybrid, and hydrogen fuel-cell vehicles. This can only increase moving forward with the pending shift.
However, in Canada, an article from the Financial Post estimates that the “tipping point” won’t be until 2025. According to Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc, an industry consultancy, it’s improbable that the next decade will bring any noticeable negative impact on the global sector. He also claims that gas-fuelled cars will remain a significant factor in the industry for at least another few decades.
With the new technology entering the auto industry, there will be radical demand for well-trained engineering and technical workforces specializing in robotics, AI, sensors, telecommunications, and advanced manufacturing processes. Unfortunately, that doesn’t guarantee that there will be as many jobs made available.
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Conclusion
While Toyoda might be justified for being weary of this coming change throughout the industry, there’s no doubt in anyone’s mind that there’s going to be some cracks in the road. While manufacturers are still working out the kinks of making EVs as green as people have hoped, this opens the door for a completely new job market.
A market that will require a whole skill set, training and education. It’s doubtful that someone who comes down from building components for ICE vehicles can just jump into engineering AI or sensor technology. We also can’t ignore the effect this shift will have on the supply chain.
Despite mining for batteries being quite harmful to the environment, they still make up close to a third of an EV’s total cost. However, that is estimated to drop by approximately 20% by 2025. While the battle between lithium-ion and hydrogen fuel still rages on, overall cost and performance will ultimately be determined.
Only time will tell how this will affect the auto industry, as Toyota will soon release their first brand of electric vehicles, despite their reluctance.