Boatloads of money in automotive learning

By 2030, 30% of all new cars sold will be electric vehicles.

Electric cars do not need complicated engines and gearboxes, which account for 60% of a car's value.

Emission standards and subsidies for electric vehicles should lead to a switch to electric cars.

And that's not all.

For the first time in Europe, low-cost electric vehicles will be cheaper than conventional vehicles due to EU7 emission standards and the increased cost of exhaust aftertreatment. As a result, 60% of the technological capabilities of this market segment will quickly become obsolete.

OEMs are world class in training factory workers.

12 million people work in the automotive industry, according to the European Automobile Industry Association. This is equivalent to the population of Belgium, Greece or Sweden.

For complex manual work, the automotive industry has adopted and optimized the slow but effective method of "learning-by-doing" on the job. For decades, factory workers have been trained in every step of car assembly. 

This learning approach has also extended to offices: When an employee moves from the assembly line to the office, they bring this learning approach with them. Therefore, the "learning-by-doing" approach applies to all training in the automotive industry.

With the speed at which technology is changing in the automotive industry, this learning strategy is too slow. Car companies that do not accelerate the change in skills will quickly go out of business.

The speed of learning determines the ability to survive in the automotive industry.

Unfortunately, past successes are the biggest obstacle to the future.

Automotive managers are taught to learn on the job.

As a result, technical training and further education for employees in the automotive industry is surprisingly rare. There is a lack of appropriate offers

We surveyed 34 senior car managers last year. Only 25% could recall any formal training. But even among those who had been trained, the focus was on leadership and conflict resolution, not technical skills.

The industry has invested billions of euros in technology change. The lack of formal technical training cannot therefore be attributed to a lack of money.

By 2030, tens of billions of euros will need to be invested in technical training.

Tesla is an example of the technical skills needed for the electric future: customer data-driven engineering, cost manufacturing for electric vehicles, artificial intelligence, chip design for the automotive industry, new business models and improved battery technology, charging electrics and car software.

Of course, car manufacturers are aware of this:

• BMW extended the average training period from two to four days.
• Mercedes-Benz has announced a learning initiative worth 1.3 billion euros.
• Audi has increased the number of training days from three to six.

Learning became more efficient during the pandemic: Web-based training reduces costs and accounts for 80% of all training. Classroom training is becoming increasingly rare. 

However, this shift in focus will not end here.

This is creating an automotive learning market worth billions every year.

As the industry introduces new technologies, technical skills need to be improved.

Of course, it is impossible to retrain all 12 million employees.

A hypothetical estimate of the industry's learning budget is as follows:

• 15% of employees would be retrained.
• Up to 25% of employees would be upskilled.
• The remaining employees would be provided with updated training programs.

Technological change will lead to additional investments of EUR 35 to 42 billion for learning technical skills. To remain viable, the sector will have to spend a lot of money.

That's a lot of money. Whole boatloads.

And within the next five to ten years, this money will spur new incumbents to develop engaging, effective, scalable and low-cost tech learning for the automotive industry.

TL; DR

• The transition to electric vehicles will make about 60% of technical skills obsolete.
• The automotive industry is a leader in training factory workers, but lags behind in technical training for office workers.
• Some of the 12 million people employed in the automotive industry in Europe need to be upskilled or retrained.
• This requires an investment of 35 to 42 billion euros in technical training and triggers a wave of innovative, scalable and cost-effective learning programs for the automotive industry.

Before you go

Despite the Chinese government's cut in subsidies, the Chinese electric vehicle market will continue to lead the global market. The micro and premium electric vehicle segments are expanding rapidly, while the compact class is stagnating. The most intriguing advances concern chargers, battery prices, residual values and recycling programs.