BusinessJun 20, 2026
Rising Costs and EV Market Cooling Trigger Auto Industry Layoffs
Industry Shifts
Rhea Lobo
Discover
The auto industry is shedding jobs across multiple companies and continents, driven by a slowdown in electric vehicle adoption, mounting trade pressures, and a push by manufacturers to cut costs before conditions get worse.
EVs accounted for 7.8% of new US auto sales in 2025, down from 8.1% in 2024. That modest retreat has coincided with manufacturers pulling back on earlier EV production targets, with some automakers once projected to produce as many as 4.7M electric cars by 2028.
The Trump administration's rollback of federal EV support has accelerated those plan reversals.
Gas-powered cars rely on over 2K moving drivetrain parts, while EVs need just 20–25. EVs don't require oil changes, spark plug replacements, exhaust systems, or radiators. That simplified architecture threatens jobs in manufacturing, auto repair, and fuel retail.
More than 7M people work in US jobs tied to the auto industry, according to the Bureau of Labor Statistics.
In Germany, Volkswagen is pushing ahead with restructuring that targets roughly 50K job cuts across its German operations by 2030. The company, which houses brands including VW, Audi, and Porsche, has already cut roughly $1.15B in costs through collective bargaining agreements and downsizing.
"The next few years are critical," CEO Oliver Blume said at the company's annual shareholder meeting.
The pressure isn't limited to legacy automakers. EV startup Rivian laid off hundreds of workers recently, affecting employees in its service and customer organization. The cuts represent less than 2% of Rivian's workforce of roughly 15.2K.
The United Auto Workers union has called for a "just transition" that protects workers through the shift, arguing that battery plant jobs must be as good or better than current manufacturing roles. Whether that standard is met will depend on how quickly the industry stabilizes around a technology it has not yet fully committed to.
