Volvo zero truck 450x300 NH4HrZ

Truck manufacturing job losses will be absorbed by energy sector, finds study

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While heavy-duty vehicle manufacturers will shed thousands of workers in the shift to zero-emission offerings, these job losses will be more than compensated through new positions in the growing energy and infrastructure sectors, a new study has found.

The study, carried out by Boston Consulting for green group Transport & Environment (T&E), looked at the consequences of European manufacturers delaying the switch away from combustion engine vehicles to electric and hydrogen engines – a move that would open the door for foreign competitors, it was found.

Soaring demand for zero-emission trucks will see buyers turn to foreign brands if EU truck makers do not have sufficient supply, a scenario that could see EU brands cede around 11% market share to Chinese manufacturer BYD and the US’s Tesla by 2035, according to the study.

The United States has already set a 100% zero-emission heavy-duty vehicle (HDV) sales date by 2040, with China aiming to rapidly grow zero-emission truck sales.

If foreign manufacturers gain a significant foothold in the European market, one scenario put forward by the study forecasts a decline in GDP of EUR1.4 billion.

However, if Europe tightens its emission standards for trucks, setting a 100% phase-out of polluting vehicles by 2035, more zero-emission offerings will be available for European consumers – thereby preventing the need for foreign imports, the study theorises.

“Our truck industry risks repeating the loss of sales to Tesla and BYD that we’ve started seeing in the car market,” said Sofie Defour, freight director at T&E, referencing the difficulties faced by EU brands Volkswagen and Stellantis in the face of Chinese and US competition.

“To retain dominance at home, European truck makers need to go electric faster. More ambitious EU CO2 standards, alongside green industrial policy, will ensure they keep up with demand while bringing down costs for hauliers,” she added.

The study comes amid a debate among EU legislators on future CO2 standards for new heavy-duty vehicles. Under a European Commission proposal tabled in February, CO2 reduction targets for trucks would start with a 45% reduction compared to 2019 levels by 2030, scaling up to 65% by 2035 and reaching 90% by 2040.

T&E has long campaigned for tighter carbon standards, advocating for a 100% reduction by 2035 – a move that would essentially end the production of combustion engine trucks.

The green group argue that setting binding targets would ensure that manufacturers stick to their diesel engine phase-out goals, warning that ambitious voluntary targets “don’t always materialise”.

It would also act as a signal to the wider industry, ensuring that those in related sectors, such as charging infrastructure and battery production, are given a clear market development direction.

Around 380,000 trucks are sold per year in the EU, contributing EUR75 billion to GDP. Some 577,000 people are employed in the EU truck manufacturing sector.

Heavy-duty vehicles are responsible for approximately 4% of total EU emissions, and 27% of road emissions.

According to the study, the end of internal combustion truck manufacturing will see some 35,000 thousand job losses among European heavy-duty vehicle manufacturers. While complex combustion engines require hundreds of parts, electric vehicles are comparatively simpler, requiring fewer workers to put together.

However, the increase in electric vehicles will see demand for electricity skyrocket, as refuelling with petrol and diesel is replaced by plugging into the grid.

To meet the extra demand from the green transition, Europe must greatly increase its electricity output, which will see a corresponding boom in jobs in the energy sector according to Boston Consulting, which estimates that an additional 55,000 jobs will be created in renewable electricity generation.

A further 6,000 jobs will be added in the field of infrastructure, as Europe looks to install some 185,000 charging points by 2035, while 3,000 jobs will be created in battery cell production.

Economically, the study finds that the EU economy will benefit from shifting to zero-emission vehicles, due to the higher-value supply chains. Despite losing 35,000 in workforce size, truck makers are expected to contribute an extra EUR3 billion in GDP after the reorientation towards hydrogen and electric vehicles.

“The transition to zero-emission trucks is good for jobs and the climate. But the size of the economic gains depends on the speed of the transition,” said Defour.

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