IMF Backs Toyota's Warning That BEV Roll-Out Would Cost Auto Worker Jobs, Wages

The International Monetary Fund has agreed with a prediction by Toyota’s chairman Akio Toyoda that the battery-electric vehicle roll-out will cost millions of auto worker jobs.

That’s the findings of the latest IMF World Economic Outlook study into the effects of a global switch from internal-combustion-engine products that will also damage Europe’s gross domestic product (GDP) figures, Reuters reports.

The IMF points out that the global automotive industry is known for having high wages, strong profits, large export markets and using a high degree of technology.

Its study suggests an acceleration toward BEVs would remake that landscape, particularly if China is allowed to maintain its state-subsidized edge in production and exports against U.S. and European rivals. Under what it describes as realistic BEV market penetration scenarios, Europe's GDP would be reduced by about 0.3% in the medium term.

Europe's GDP estimate for 2023 was €17.1 trillion ($18.5 trillion) so the annual reduction in revenues would amount to about €57 billion ($61.6 billion).

The IMF suggests the industry will see auto workers earning less than they do today under pressure from cheap Chinese products. It says: “In these scenarios, employment declines in the automotive sector, and labor reallocates gradually to less capital-intensive sectors (with lower value added per worker).”

Its predictions will be used by those supporting the 100% tariffs on Chinese BEVs imposed by both the U.S. and Canada and could lead others in the European Union trading bloc to insist that the current tariff proposals are too soft.

Rising adoption of BEVs has been supported by the EU's goal of reducing emissions from cars by 50% for the 2030-2035 period from 2021 levels, while the U.S. government has provided subsidies for BEVs and charging stations.