Wilfried Porth arrived in St. Gallen by car. As a member of the Board of Management of Daimler AG, this might not be surprising, but he was far from alone: A large number of students, leaders and speakers did the same.

Even though motor vehicles are the most commonly used modes of transportation today, another future may lie ahead of us. If the most extreme predictions come true, only  20% of Americans will own a car in 15 years. Instead, carsharing systems and self-driving cars may be their first choice for getting around. The number of passenger  vehicles on American roads is also expected to plummet, from 247 million in 2020 to 44 million in 2030.

Not only one vision

“Everyone is talking about carsharing, which is a fast-developing business model and getting more and more attractive,” Porth says. The company is developing different ecosystems for urban mobility. Recently, Daimler AG and BMW Group announced that they want to combine their carsharing businesses to shape the future of mobility.  The joint venture also includes ride-hailing, parking and electric-vehicle charging. “We cannot rule out any technology,” he says. “To focus on only one technology would not be clever.”

The Daimler executive points out that car companies’ need to maintain a diversified portfolio of technologies means combustion engines have not yet reached the end of the road. “At the moment, technologies are declared dead that are not really dead at all,” Porth says. But, with China, the world’s largest car market, looking to ditch gas and diesel cars in favor of cleaner vehicles in the future, there are signs that the internal combustion  engine has a limited future. “The question is whether a modernised combustion engine, the fuel cell or a battery-charged electric vehicle can create the best overall ecological footprint in specific use cases. For example, you have to take into account where the energy for e-mobility comes from,” Porth says. And that, says Porth, is not something that the customer has to worry about at the moment – a claim which many analysts, investors, and car buyers might disagree with.

There might be another group that has something to worry about. Carsharing systems and new engine technologies could leave many automotive industry workers without  jobs. The automotive industry is an important factor for the worldwide labour market: Today around 13 million people in Europe and 7 million in the US work in the car industry.

Different skills will be required to produce the cars of the future, however. New machinery, automation and products like electric vehicles will demand new skills from the automotive workforce, while other skills will no longer be needed. For example, while a gasoline or diesel engine consists of more than 1,000 parts, there are only around 200 parts in electric engines. A study carried out by the German Automobile Association and the Ifo Institute claims that with the end of combustion engines around 600,000 jobs in the auto industry would be threatened in Germany alone.

Retraining workers is one possible fix. “We have always prepared people for new challenges,” says Porth, whose responsibility as a Daimler board member includes human resources. “It is true that the challenge we are facing seems bigger than those we have dealt with in the past, but change, innovation and evolution is nothing new for us. We have a 130 year history of managing change successfully.”

Game-changing technology

Changes in the automotive industry do not only affect car manufacturers, they also have an effect on upstream industries such as steel, chemicals, or textiles, as well as on downstream industries including car repair and mobility services.

Wolf-Henning Scheider has been CEO of ZF Friedrichshafen AG – an industry giant with more than 146,000 employees – since February 2018. What could new technology mean for one of the biggest automotive suppliers in the world? “We have experienced some upheaval over the last few decades, says Scheider. “However, in the end we always came through with more employees.”

Scheider says that the car of the future will look simpler. But this car will need different technologies, utilising “fewer mechanical and more electronic components.”

Like Porth, Scheider believes that offering more employee training could solve qualification issues. “We already train our workers,” says Scheider. “But I do not want to play down the fact that the need for some skills is decreasing, while the demand for others is on the rise.”

But is this really enough? If the electric motor is built by only a few people, what happens to the surplus workers? Scheider says that some challenges are too big for companies to solve alone. As jobs come under threat by automation and shifting technology, cooperation with the government is important to manage this change on a macroeconomic level.

So is the car industry ready for the revolution? That depends on the kind of revolution we will face. Porth says their business model might change in the future, but it will not be totally different. “We will sell cars, but we will also sell mobility,” he says.