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18 June 2024

Auto industry points to rising European energy costs and US labor rates as key challenges

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  • Second Global ABB Automotive Manufacturing Outlook Survey reveals concern for rising European energy costs and US labor rates
  • Doubts over EV production deadlines may be linked to key skills shortages
  • ABB’s power-efficient automation solutions address key challenges

New global research commissioned by ABB Robotics and industry specialists Automotive Manufacturing Solutions (AMS) has revealed that the rising cost of energy in Europe and escalating US labor rates are becoming major challenges for the automotive industry.

ABB Robotics’ second annual barometer survey of the automotive industry showed that more than half (53%) of all European respondents cited rising energy costs as one of their top-three concerns, compared to only 38% of those in Asia. In North America, 63% say rising labor costs are their single biggest concern, perhaps amplified by recent union negotiations which secured double-digit pay increases for their members.

“Increasing labor and energy costs were prominent in our second annual survey,” said Joerg Reger, Managing Director of ABB Robotics Automotive Business Line. “However, the solutions to reduce energy consumption at the point of manufacture are already available. New generations of intelligent automation and robot controllers like ABB’s OmniCoreTM greatly reduce power usage – by up to 20 percent – through the use of leading software, lighter materials and regenerative systems.”

Doubts on viability of EV production deadlines remain high

ABB’s first Global Automotive Manufacturing Outlook Survey questioned industry experts as to whether legislative timetables to move to pure electric vehicle production were achievable. This year’s survey returned to the subject and showed a drop in the number of respondents who strongly believed the transition could be realized, from 11% to just 8% this year. More than half (53%) still believe the targets will never be met, compared to 59% the previous year.

Specific skills shortages offer insights

One reason for doubt over EV production deadlines may lie in concerns regarding key skills shortages. Over half (54%) of all respondents saw specific skills shortages as having a major impact on manufacturing, with European (52%) and Asian (58%) participants singling out EV and battery expertise as their primary areas of concern.

“Skills shortages in some very specific areas remain an industry concern,” said Daniel Harrison, Automotive Analyst from Automotive Manufacturing Solutions (AMS). “As EV production accelerates, the need to upskill or redeploy large numbers of existing colleagues as well as attract new talent into the automotive industry becomes more critical. EV manufacturing in conjunction with the increased software, electrical, and advanced electronic content requires new and different skills and the survey reflects a belief that more needs to be done.”

ABB Robotics has responded to this challenge by investing in outreach programs, developed in collaboration with hundreds of schools and universities around the world, to teach students automation and software skills that will go on to form the basis of the smart manufacturing solutions of the future. The company’s IRB 1090 education robot, authenticated by, is designed to empower students as they learn the fundamentals of robot programming.

Supply chain disruption highlighted

The survey also highlighted how supply chain disruption caused by global instability, which has often resulted in component shortages and production delays, remains a key industry concern. More than a third (35%) of all respondents highlighted this issue, with a sharp increase amongst respondents in North America (51%) where it was cited as the region’s top manufacturing challenge.

The ABB survey gathered opinions on a range of topics from a comprehensive mix of nearly 400 industry experts from vehicle manufacturers and suppliers at all levels of management and engineering as well as other key professionals throughout the automotive manufacturing world.

Further insights from the ABB AMS Automotive Manufacturing Outlook Survey can be found 👉🏻here.

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