Europe’s automotive industry could lose as many as 726,000 jobs by 2040 unless measures are taken to strengthen key technologies, according to a study by the Fraunhofer Institute for Industrial Engineering (Fraunhofer IAO) commissioned by German employers’ association Gesamtmetall. The findings, first reported by Politico, warn that Europe could become permanently dependent on third countries for critical technologies if no corrective action is taken.
The study examines all segments of the automotive value chain involved in manufacturing vehicle powertrain components. According to the report, the sector employed around 1.6 million people across Europe in 2024 and generated approximately €250 billion in value. However, the researchers project significant job losses over the coming years, with employment expected to decline steadily through the next decade and beyond.
The study estimates that around 375,000 jobs could disappear by 2030. By 2035, cumulative losses across Europe could reach 660,000 positions. If current trends continue, the number of jobs lost could rise to as many as 726,000 by 2040, according to the projections.
The researchers said the projected decline highlights the challenges facing Europe’s automotive sector as it undergoes structural changes. They warned that, without targeted measures, Europe risks long-term dependence on non-European suppliers for technologies considered critical to the industry’s future.
The findings come as several major German automakers have announced cost-cutting measures that include planned workforce reductions. BMW and Porsche have recently confirmed discussions with employee representatives regarding proposed job cuts as part of broader restructuring efforts.
Volkswagen, Germany’s largest automaker, is also preparing significant reductions. According to the report, the company is expected to eliminate around 100,000 jobs worldwide over the coming years. In Germany, Volkswagen is planning to close four manufacturing plants as part of its restructuring programme.
The study’s projections reflect a broader employment trend that has already become visible in Germany’s automotive industry. Data released by the Federal Statistical Office last September showed that the sector employed 50,000 fewer people in 2025 than a year earlier, representing a decline of 6.3%.
The figures also showed that total employment in Germany’s automotive industry had fallen to its lowest level since 2011, underscoring the sustained contraction in one of Europe’s largest manufacturing sectors.
According to the Fraunhofer Institute’s analysis, the automotive powertrain segment remains a major contributor to Europe’s industrial economy, both in terms of employment and economic output. The report states that future developments will depend on whether effective measures are introduced to address technological competitiveness and reduce reliance on external suppliers for key automotive technologies.
The study, commissioned by Gesamtmetall and reported by Politico, presents the projected employment decline as one of the most significant workforce challenges facing Europe’s automotive manufacturing sector over the next 15 years.
