More than 400,000 jobs could be lost in Germany over the next decade as its auto industry shifts towards electric vehicles, according to a government-sanctioned report that underlines the wrenching change facing Europe’s largest economy. In a worst-case scenario, Germany’s workforce could shrink by almost 1 per cent by 2030 if carmakers such as Volkswagen and Daimler are forced to rely on imports to meet targets for electric vehicle sales. The vast majority of vehicle batteries –  the most valuable component of electric cars  are manufactured in Asia.

The rapid shift away from the combustion engine, spurred by increasingly stringent EU emissions regulations, will be “accompanied by a profound change in terms of value creation”, warns the study by a focus group from the National Platform on Future Mobility (NPM), which included executives from carmakers as well as suppliers such as Bosch.

“If we want to maintain industrial value creation and jobs in the local automotive industry, we will need the entire value chain to be here,” said Jorg Hofmann, chairman of Germany’s IG Metall union and head of the NPM working group. The report comes at a time of deep gloom in the German car industry, as one of the pillars of the country’s export-led economy confronts the staggering cost of moving away from combustion eng.ines.