the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
May 8, 2023
The following article is translated from an article appearing in Lutte de Classe # 232, May-June 2023, issued by comrades of the French Trotskyist organization, Lutte Ouvrière.
After many twists and turns, the European Union (E.U.) at the end of March approved a ban on the registration of cars powered by gasoline or diesel engines. The ban would start supposedly by 2035. However, an exception will be made for vehicles using synthetic fuel, which currently is produced in only one factory in Chile and which, because of its cost, will be used mainlfy by Porsche and Ferrari owners.
By 2035, of course, much can change. In 2022, according to the International Energy Agency (IEA), out of a total of 82 million vehicles sold worldwide, only 10 million of them were electric, that is not quite 12%. Even with predictions of an increase, they lag behind. Of course, in China, it is already one in four today. The United States says it wants 50% of vehicles sold to be electric by 2030. [But, sales are slow. Electric vehicles, on average took 92 days to sell in May, and over 100 in June, compared to 54 days for gas-powered vehicles.]
In one part of the world—Europe, the United States and China—the proposal at least is to shift toward the electrification of cars. For the inhabitants of Bangladesh or the Central African Republic, who have only one motor vehicle for every 250 inhabitants, the problem is hardly the type of motorization.
The switch to electric cars is obviously not due to a desire on the part of manufacturers to combat pollution. In fact, behind the very real environmental problems, there is a commercial war between car manufacturers and an economic war between the major powers. The interests of both are intertwined, but they often oppose each other, which is the rule in capitalist production dominated by private interests.
Car production is largely globalized and manufacturers have little connection with their country of origin. The Renault Clio is produced in Slovenia, the Peugeot 208 in Slovakia and Morocco. Today, the factory that produces the most cars in France is ... Toyota, with the Yaris in Valenciennes. Volkswagen has long been the largest manufacturer in China, and Toyota was the largest in the United States in 2021.
Speeches pushing protectionism, in fact, are meaningless. Protectionism does not and cannot address the problem of job losses associated with electrification of the car fleet. Instead, they justify government subsidies to car companies, and they divide workers. Under the pretext of electrification, job cuts are planned all over the world, as shown by the announcement by Stellantis of a new “voluntary” redundancy plan, which has not yet been quantified, but which is aimed at the group’s 35,000 employees in the United States.
In an email to employees, quoted by Reuters, Stellantis’ North American COO Mark Stewart explained, “The competition is fierce, and we can’t put the entire cost of electrification on the consumer.” Nor on shareholders, but that didn’t need to be said. Stellantis and the other manufacturers want to put the cost of the energy transition on the workers. Whatever its cost, it will pay off in ways that fuel stock market speculation, as the story of Tesla illustrates.
Founded in 2003, Tesla Motors went public in 2010. It was the first IPO of a company producing cars in the United States since Ford’s in 1956. By October 2021, Elon Musk’s firm was worth more than one trillion dollars on the stock market, even though it produced less than one million cars a year. It was worth four times as much as Toyota, which produced ten times as many cars. Last year, Tesla’s share price may have plummeted, even though the company produced more cars, 1.4 million, but it still was extremely profitable—so much so that this year, in order to consolidate its position in the market, the company was able to launch a price war in the high-end electric car market.
The world’s production of cars continued to grow throughout the 20th century, causing intractable traffic and pollution problems in major cities. Annual production, increasing from about 10 million in 1950 to 41.2 million in 2000, reached more than 90 million before the health crisis.1 For the year 2022, due to rising fuel prices, lack of microchips, and uncertainty related to the energy transition, it has risen to over 82 million. There are now more than 1.4 billion cars on the road worldwide, four times as many as in 1976.2
Western industrialists developed the combustion engine, invented in the second half of the 19th century, whose efficiency is, despite the progress made since its invention, still relatively low, around 40%: a large part of the energy developed by the explosion is dissipated in the form of heat. These engines use petroleum-based fuels, supplied by the trusts, also Western, which dominate this market. They have the disadvantage of emitting numerous pollutants: nitrogen oxides, volatile organic compounds, benzene, sulfur dioxide, CO2 and fine particles. Fine particles are also emitted by the wear of tires and brake pads. Another disadvantage is that, because they are combustion engines, they make noise.
The Dieselgate scandal, which broke in September 2015, showed that manufacturers—Volkswagen first, but in fact all of them—were falsifying the results of pollution tests. This finished the discrediting of diesel engines, which are obviously more polluting, even if PSA (Peugeot S.A.) has long explained that, thanks to the particulate filter that equipped its engines, the air came out of the exhaust cleaner than it had entered the engine. Presenting a diesel engine as an air purifier was a daring move!
According to Santé Publique France (SPF), fine particles, emitted by engines as well as by the wear and tear of tires, are responsible for 40,000 deaths per year and the loss of nearly eight months of life expectancy. But the pollution generated by the development of the private car has not prevented governments from making its use widespread, to the detriment of public transportation.
China produced just over two million cars in 2000. But with 27 million vehicles produced last year, the country has become, by far, the world’s largest producer, ahead of the U.S. (14 million), the E.U. (12 million) and the rest of the world (29 million, mainly in Japan, India and Mexico).3 China has a population of over 1.4 billion. Automobile production in China is a recent phenomenon, and was initially carried out through associations between Chinese industrialists and Western and Japanese manufacturers, who have been very interested in this developing market for the last thirty years, with the emergence of a large middle class in the shadow of the country’s economic development.
Since the 2000s, Chinese car makers have been manufacturing electric cars. On the world markets, the Western, Korean and Japanese trusts occupied the place for cars equipped with an internal combustion engine. The electric car was a new market, which Western capitalists had not ventured into, being more interested in maximizing the profitability of their facilities. Several Chinese companies are well established. Some are state-controlled, such as Dongfeng, FAW and Changan. Others, such as SAIC and BAIC, are controlled by regional authorities, and others are privately owned, such as Geely and BYD. These companies bought up factories that were no longer of interest to their European shareholders. SAIC (Shanghai Automotive Industry Corporation), founded in 1997, is known in France for the vehicles sold under the former British brand MG. Another large group, Geely, bought the Volvo and Smart brands.
BYD (Build Your Dreams), founded in 1995, originally manufactured batteries and entered the electric car business in China in 2003, ten years before Renault’s Zoe was released. BYD’s sales have increased by 90% in one year, and it has overtaken Volkswagen on the Chinese market in the first quarter of 2023. The profit has increased five times in the last year! And BYD is in line to buy the Ford plant in Saarlouis, Germany, which produced the Focus. Coming long after Renault, Peugeot, Volkswagen, Mercedes, Ford and GM, Chinese companies are making a place for themselves on the world market, with the same capitalist logic as their predecessors.
Today, the talk of ecological transition and global warming, added to the competition with Chinese manufacturers, makes all the car groups in the world start to build electric cars. Renault and Stellantis have announced that all their vehicles will be electric by 2030 in Europe. If it happens, it will only be done through direct government subsidies to manufacturers and the creation of charging stations for electric vehicles, largely financed by public authorities.
In the summer of 2022, U.S. President Joe Biden announced a vast 450-billion-dollar plan, the Inflation Reduction Act (IRA), to help relocate industry in the United States. This is a real golden bridge offered to manufacturers, whatever their nationality. As a result, the Swedish battery manufacturer Northvolt is considering crossing the Atlantic. Its managers have calculated that if they choose to build their next giant factory in the United States rather than in Germany, they could benefit from eight billion dollars in aid, or 70% of their investment. That’s worth thinking twice about, especially since long-term energy supply contracts are four to five times cheaper than in Europe.
Canada has aligned itself with the United States, also providing support. Thus, Volkswagen has just concluded an agreement with the Canadian government for a large battery plant in Ontario, with production subsidies of between 8 and 13.2 billion Canadian dollars for the next decade. “Unprecedented in the history of Canada,” according to Le Monde (May 6). Volkswagen has also reportedly abandoned its plans for a 100% electric sedan factory at its Wolfsburg headquarters in Lower Saxony in favor of producing a model in the United States.
Armed with the dollar and the power of the world’s richest state, the U.S. is engaged in an economic war to bring factories to the United States. Since April 21, an executive order under the IRA requires that, in order to receive a $7,500 tax credit for the purchase of an electric car, it must have at least half of its components made in North America. This is yet another way to lure auto capitalists to manufacture “Made in the USA.” The U.S. government is aiming for 50% electric cars in 2030. To achieve this, it has passed three laws on infrastructure, semiconductors, and “clean” technologies, with 135 billion dollars in subsidies for manufacturers.
While the cradle of the American auto industry is located in the Great Lakes region to the north, the southern states, following the federal government, are also deploying their aid and trying to attract manufacturers with cheaper energy, particularly in Texas where Tesla has set up shop. In an op-ed, Cindy Estrada, former vice president of the United Auto Workers (UAW) union, worried that “manufacturers will take advantage of the transition to electric vehicles to de-unionize” (Les Echos, November 24, 2022). Wages are lower in the South, in plants without unions, and in poor states such as “Alabama, for example, one of the major producing states [where] 40,000 workers are employed in non-union plants such as Mercedes, Honda, Toyota and Hyundai, as well as parts manufacturers.” All the capitalists are rushing to impose lower wages, harsher working conditions.
The E.U. was the main target of Biden’s measures and this U.S. offensive.
Faced with the IRA, the European Union said it was ready to put 350 billion on the table. “We had to lift mountains and get everyone in line, but Europe has its answer to the IRA,” boasted European Commissioner Thierry Breton. “We will finally be able to play on equal terms.”
This remains to be seen. First, the E.U. is not a single market. Manufacturers have different, even contradictory interests, and it is difficult for them to have a common policy. For example, the German government does not want to get angry with China, a key market for Volkswagen, Mercedes and others. Similarly, German industry has been hit hard by the war in Ukraine, because it was very dependent on Russian gas and many subcontractors of German factories were located in Ukraine, which disrupted supply chains.
But in the E.U., as in its member countries, the faucet of public subsidies is wide open. Visiting the Stellantis engine plant in Trémery, Moselle, in December 2022—which PSA said was the largest diesel engine plant in the world—French Industry Minister Roland Lescure announced 1.1 billion euros to support investment projects in the automotive industry, soliciting plans for projects. Even a group like Stellantis, which has planned to cut 2,000 direct jobs by 2025 at its two plants in the Metz-Trémery area—the one in Metz producing gearboxes—will be able to benefit from these funds.
The energy transition is a pretext for new aid for car makers and equipment manufacturers, but not only. For example, in France, Imerys, a company with 170 mines and factories worldwide, with sales of more than four billion euros and 14,000 employees, has a project to exploit lithium, which is essential for the manufacture of batteries. The exploitation of this mine, located in Echassières in the Allier region, requires investments of around one billion euros, half of which should come from public aid, as part of the ecological transition!
The whole world, and not only the poor countries, is suffering from a shortage of electric power. And this is the moment that the states of the great powers have chosen to promote the electrification of individual cars.
In the United States, in the fall of 2022, this shortage led California to ban electric car charging during peak hours. In France, last winter was marked by warnings about the risk of power shortages. As a result of the government’s bludgeoning and the explosion in prices, consumption fell by 10%, removing the risk of a blackout, if the threat was real at all. In South Africa, the government has declared a state of national disaster in the face of a power shortage that is forcing blackouts of several hours a day, due to aging coal-fired power plants.
Everywhere, the cause is the same: private management of electricity production and transmission that can only lead to disasters, since it is obvious that producing this energy should be planned and organized according to social needs, not speculators’ needs. In 2001, speculation created a giant blackout in one of the richest states in the United States, California. Large companies took power plants off line—supposedly for maintenance—with the aim of manipulating the price of electricity on the markets. But the grid ran out of power and it collapsed, causing blackouts affecting millions of people. All over the world, production and distribution have been delivered to the market.
In France, the government, which had the controlling interest in EDF (Électricité de France), launched the construction of nuclear power plants in the 1970s. They are now reaching the end of their lifespan, with many long shutdowns for maintenance, and no real plans to replace them except for the EPR in Flamanville, which is being built with increasing delays and cost overruns.
To make the most of existing installations and invest as little as possible, all capitalist groups do the same. EDF, a public company created after the war to supply cheap electricity to all industries, became a limited public company in 2004, part of whose capital was listed on the stock exchange. EDF’s monopoly on the supply of electricity has been replaced by the market, obeying not the interests of all the capitalists, but those of the various private operators and of speculation. This ends up posing so many problems for the very functioning of capitalist society that the state has considered renationalizing it.
Electrifying the entire car fleet would lead to a 10% increase in annual electricity consumption in France, according to the network manager RTE, with major peaks in consumption when vehicles are recharged on their way home at night. In other words, this poses unresolved problems for the time being.
The advocates of the electric car explain that it does not emit any CO2 while driving, which is undeniable. But the carbon footprint of a car is not measured by its use alone. The production of an electric car emits twice as much CO2 as production of a combustion engine car, because so much more energy is needed to produce the batteries (Reporterre, September 2020). While being driven, the electric car may not emit any, but charging the car more than makes up for that. Sixty percent of the electricity produced in the world is based on fossil fuels. That’s why electricity is the main CO2 emitter worldwide. So while CO2 is not emitted by the car, it has been emitted in the oil, coal or lignite power plants used to charge the car.
In addition, the weight of the vehicle and the size of the batteries have a significant impact on its carbon footprint. Some large SUVs weigh up to two tons. In the U.S., with the manufacturers’ push to go to ever-larger vehicles, heavy batteries will greatly increase the production of fine particles linked to tire wear.
There is so far no plan for recycling of batteries, which will create enormous amounts of pollution, not to mention all the pollution linked to the extraction of the metals necessary for their manufacture in the world. And then there is child labor, which is used in the cobalt mines in the Congo. In Serbia, the population revolted against a project of exploitation of a lithium mine by the trust Rio Tinto—the project was finally abandoned in 2022.
In fact, there is no miracle energy. Any source of energy poses problems for the environment and for working conditions. The industrial revolution has turned the subsoil of many regions into Swiss cheese through coal mining, which caused generations of miners to die of silicosis. Oil extraction has polluted entire regions. The same is true of the mines that provided industry with the metals it needed, or the uranium for nuclear power plants. Each time, the choice of a resource was made according to the private interests of the capitalists.
For example, France has long been the country of diesel because in the 1970s the commissioning of nuclear power plants led to an overproduction of diesel in the refineries, due to the shutdown of the many fuel oil plants. This was a problem for the oil companies, which found themselves with an overabundance of diesel. Public authorities then decided to favor diesel fuel fiscally, which benefitted the manufacturers, in particular Renault and Peugeot. And so much the worse for the health of the population!
Until recently, most car industry bosses were not in favor of the shift to electric cars. They preferred to continue to enrich themselves with their highly profitable old installations. Carlos Tavares, CEO of Stellantis, was pointing out all the flaws and problems with the switch to electric. But in the face of his competitors on the world market, he made up his mind and obtained substantial subsidies to shift to electric. Allied with TotalEnergies, Stellantis created a company in 2020, Automotive Cells Company (ACC). Mercedes joined them. The three companies now each hold a third of the capital of ACC, which will produce batteries with considerable state and European Union aid. Batteries concentrate nearly half the value of the vehicle, hence the interest of the trusts in this kind of factory!
According to Les Echos, half a million jobs will be at risk in Europe by 2040 as a result of the switch to electric cars, which require 40% less manpower. The jobs lost are far from being offset by the creation of battery factories, such as in Douvrin in Pas-de-Calais, and electric motor factories, such as in Trémery in Moselle. Moreover, the automotive industry and equipment manufacturers have been shedding jobs on a massive scale for years, regardless of electrification. The PSA-Stellantis plant in Sochaux will produce the same number of cars in 2021—265,000—as it did in 2000. The number of employees, including all categories, has fallen from 23,036 to 9,581 in those 20 years. Increased work rates, massive recourse to subcontracting: job cuts are the rotten fruit of capitalist exploitation. And electrification is only the latest pretext for continuing down this road.
In the face of automobile bosses gorged with profits and public subsidies, why should workers let their jobs and wages be attacked in the name of the energy transition? Maintaining the current jobs can be done only by imposing the distribution of work among all without loss of wages, by taking from the profits. The profits of Stellantis will reach 16.8 billion euros by 2022. Stellantis shareholders have pocketed 5.7 billion in dividends and share buybacks. This is enough to pay a net salary of 2,000 euros a month, plus the money paid to the government in taxes, social security and pension contributions, for 118,750 employees. This means that there is no lack of money. Carlos Tavares, who earned 23.5 million euros last year, or 2,682 euros every hour of the day, including nights, knows something about this.
All human activity has consequences on the environment. The groups of hunter-gatherers, when they had exhausted a territory, had to move on to another one. But in the 21st century, the action of humanity on its environment has much more serious consequences. Human activities should be rationally organized, taking into account all the problems they pose. Producing according to the needs of humanity while respecting nature, which is impossible in an economy dominated by the logic of private profit and viscerally opposed to all planning, will be possible only in a society freed from exploitation, the dictatorship of the market and capitalist profit.
Protectionism, borders, “Made in the USA”—all these things create barriers between the workers, so that instead of considering themselves as one international class, each one is called to show solidarity with “his” boss, “his” company. On the contrary, the only way to get humanity out of the impending catastrophes rests on the internationalism that only the working class carries.
1 Figures from the International Organization of Motor Vehicle Manufacturers, at https://www.oica.net/production statistics. For 1950, this is an estimate. For 2022, figure from IFP Énergies Nouvelles, https://www.ifpenergiesnouvelles.fr/article/marche-automobile-mondial-se-redresse-en-fin-dannee.
2 Figures from https://www.transitionsenergies.com/combien-voitures-monde.
3 Figures provided by IFP Énergies nouvelles.