US Auto Industry Job Loss Statistics (2020-2025): A Complete Data Breakdown

Summary

The US auto industry experienced significant employment shifts between 2020 and 2025, marked by an initial sharp decline followed by a complex recovery and ongoing transformation. While the early stages of the period were dominated by the impact of the COVID-19 pandemic, subsequent years saw the increasing influence of automation, the transition to electric vehicle (EV) manufacturing, and supply chain disruptions, notably the semiconductor shortage. Overall, the industry witnessed a net reduction in certain traditional manufacturing roles, although new opportunities emerged in areas related to electric vehicles and advanced technologies. The retail automotive sector also experienced a period of adjustment, with employment levels in dealerships showing a slow recovery to pre-pandemic figures. These trends have had varying regional impacts across the United States, with the industrial Midwest particularly affected. International comparisons reveal similar challenges in other major automotive regions, highlighting the global nature of the forces reshaping the industry’s workforce.

Introduction

The United States auto industry has long been a cornerstone of the nation’s economy, providing millions of jobs across manufacturing, retail, and related services. The period between 2020 and 2025 represents a critical juncture for this sector, characterized by unprecedented challenges and transformative shifts. A confluence of factors has profoundly influenced employment trends during these years. The COVID-19 pandemic in 2020 triggered widespread shutdowns and economic uncertainty, leading to significant job losses. Simultaneously, long-term trends such as increasing automation in manufacturing processes and the accelerating transition from vehicles powered by internal combustion engines (ICE) to electric vehicles (EVs) have reshaped labor demands. Furthermore, global supply chain disruptions, most notably the shortage of semiconductor chips, have intermittently hampered production and impacted employment levels. These intertwined forces have created a dynamic and often volatile employment landscape within the US auto industry, necessitating a comprehensive analysis to understand the full extent of the changes.

US Auto Industry Employment Trends (2020-2025)

A. Overall Employment Statistics:

At the onset of the period, in early 2020, the US auto industry presented a relatively stable employment picture, which was abruptly disrupted by the pandemic. Examining the retail sector, which includes motor vehicle dealerships, data from August 2024 indicated employment levels were 0.3% below those of February 2020. This trend persisted into the later months of 2024, with employment at auto dealers remaining 0.4% lower in December compared to the pre-pandemic baseline. This slow recovery in dealership employment continued into the beginning of 2025. This suggests that the initial shock to the retail automotive workforce caused by the pandemic may have led to some permanent adjustments in staffing or operational models.  

Looking at the manufacturing sector, which includes motor vehicles and parts production, data from the Bureau of Labor Statistics (BLS) reveals a continuing trend of employment decline into 2025. Seasonally adjusted figures for February 2025 showed a decrease of 12.1 thousand employees compared to February 2024. Non-seasonally adjusted data for the same period indicated a similar decrease of 13.5 thousand employees. This suggests that factors beyond the initial pandemic impact, such as the ongoing transition to EV manufacturing and the increasing adoption of automation, are contributing to a sustained reduction in manufacturing employment within the auto industry.  

Interpreting employment statistics requires careful consideration of the timeframe. For instance, while reports indicated a loss of over 27,000 auto jobs in the final year of the Biden administration, a broader view reveals a net gain of 47,000 jobs during the entire term. This highlights the importance of analyzing long-term trends rather than focusing solely on short-term fluctuations or politically charged periods when assessing the overall health and employment levels of the auto industry.  

B. Employment Breakdown by Sub-Sectors:

To gain a more granular understanding of employment trends, it is essential to examine the various sub-sectors within the auto industry. In the manufacturing of motor vehicles and parts, preliminary BLS data for February 2025 showed 1,006.0 thousand employees on a seasonally adjusted basis, and 1,002.4 thousand employees on a non-seasonally adjusted basis. These figures provide a current snapshot of employment in this crucial sector, which needs to be compared with data from previous years to ascertain the overall trajectory of job numbers.  

The retail sector, represented by motor vehicle and parts dealers, presents a different picture in terms of employment volume. For February 2025, the BLS reported 2,061.2 thousand employees in this sector on a seasonally adjusted basis, and 2,045.0 thousand employees on a non-seasonally adjusted basis. These figures indicate a significantly larger employment base in the retail side of the auto industry compared to the manufacturing sub-sector. Further analysis of employment trends in auto parts suppliers, repair and maintenance services, and other related areas would provide a more complete understanding of the industry’s workforce composition. The North American Industry Classification System (NAICS) codes listed by the BLS can be used to further explore these specific sub-sectors.  

C. Seasonal Employment Patterns:

The automotive industry traditionally experiences seasonal fluctuations in employment, particularly in the retail sector. Peak demand for vehicle purchases typically occurs in the spring and fall, while sales tend to be lowest in January, February, and early March. This seasonal demand for vehicles could logically lead to corresponding variations in employment levels, especially at dealerships and related sales roles. However, the period between 2020 and 2025 witnessed significant disruptions to these established patterns due to the COVID-19 pandemic and its associated economic impacts. Further analysis would be required to determine the extent to which these traditional seasonal trends were altered or overshadowed by the more significant forces at play during this period.  

Impact of the COVID-19 Pandemic (2020)

A. Initial Shock and Job Losses:

The onset of the COVID-19 pandemic in early 2020 delivered a swift and severe shock to the US auto industry, causing widespread job losses and operational disruptions. Lockdowns and mandatory business closures led to immediate and substantial reductions in the workforce. By June 2020, the retail automotive industry alone had to terminate or furlough approximately 300,000 employees, representing roughly 25% of its total workforce. While this figure pertains to the US retail sector, the impact on production was similarly drastic globally. In the United Kingdom, for instance, car production plummeted by 42.8% between January and July 2020, illustrating the widespread nature of the disruption. Within the United States, the Alliance for Automotive Innovation estimated that 93% of all automotive production was temporarily halted by late March 2020, resulting in the lowest monthly production levels since 1945. This unprecedented combination of retail shutdowns and manufacturing halts led to a massive contraction in the auto industry’s workforce across various sectors.  

B. Temporary vs. Permanent Layoffs:

The initial wave of job losses in the auto industry during the pandemic was largely characterized by temporary layoffs and furloughs, as businesses hoped for a swift return to normal operations. In April 2020, temporary layoffs accounted for almost the entire surge in the US unemployment rate. Data indicates that 75% of the job losses experienced between March and April 2020 were temporary in nature. However, as the pandemic persisted and the economic outlook remained uncertain, a significant portion of these temporary layoffs transitioned into permanent job losses. By June 2020, the number of permanent job losers began to increase, eventually surpassing the number of individuals on temporary layoff by October 2020. This shift from temporary to permanent separations suggests that many companies in the auto industry, facing prolonged uncertainty and anticipating lasting changes in demand and operational needs, made the difficult decision to implement more permanent workforce reductions.  

C. Recovery in Late 2020 and 2021:

As government-imposed restrictions began to ease in the later part of 2020 and into 2021, the US auto industry experienced a partial recovery in both production and profitability. By September 2020, auto industry output had reportedly rebounded to levels seen before the pandemic. Furthermore, financial reports from the latter half of 2020 indicated a strong recovery in profitability for North American auto manufacturers. However, this recovery in output and financial performance did not necessarily translate into a full reinstatement of the pre-pandemic workforce. Notably, even as output returned to earlier levels, the labor force in the auto industry remained approximately 20% smaller. Looking further ahead, by 2025, overall employment in the auto industry had risen to levels well above the five-year average preceding the COVID-19 pandemic, despite production levels not having fully recovered to the same extent. This divergence between employment and production trends suggests a potential increase in productivity within the industry, possibly due to the adoption of more efficient technologies or a strategic restructuring of the workforce to meet evolving demands.  

The Role of Automation and Technological Advancements

A. Increasing Automation in Manufacturing:

Beyond the immediate impacts of the pandemic, the increasing adoption of automation in manufacturing processes has been a significant factor influencing employment trends in the US auto industry. Data reveals that the automotive sector has embraced robotics more extensively than any other industry in the United States, accounting for 38% of all operational robots. This high concentration of robots in auto manufacturing has had a direct and measurable impact on labor needs. Studies indicate that for every new robot introduced into manufacturing, approximately 1.6 jobs are displaced. Furthermore, analysis suggests that the US auto industry has already experienced a 14% reduction in its human labor force directly attributable to automation. These figures underscore the substantial role that automation has played, and continues to play, in reshaping the employment landscape of auto manufacturing, leading to a decrease in the demand for traditional manual labor roles.  

B. Impact of AI and Advanced Technologies:

Looking ahead, the influence of artificial intelligence (AI) and other advanced technologies is expected to further accelerate the automation of tasks within the auto industry, potentially leading to even greater job displacement. Projections suggest that by 2025, as many as two million workers in the broader manufacturing sector could be replaced by automated tools, a category that includes both traditional robots and more advanced AI-driven systems. While this figure is not specific to the auto industry, it indicates the general trend. More broadly, some estimates suggest that AI could potentially replace over 41% of jobs across various sectors within the next five years. Within the automotive industry specifically, McKinsey & Company projects that AI could boost productivity by approximately 1.3% annually through process optimization across manufacturing and testing stages. These advancements in AI and automation indicate a continued shift towards more technology-intensive production methods, which are likely to further reduce the need for human labor in many traditional automotive roles.  

C. Shifting Skill Requirements:

The increasing prevalence of automation and AI in the auto industry is not only leading to job displacement but also driving a significant shift in the skills required of the workforce. As traditional manufacturing roles become automated, there is a growing demand for individuals with expertise in new and emerging technologies. Industry reports anticipate a greater need for professionals such as robotics engineers, data analysts, and AI and machine learning specialists within the automotive sector. Furthermore, the implementation and maintenance of these advanced systems require a workforce skilled in areas like engineering, technical support, and robotic system operation. Even for frontline workers who remain in manufacturing roles, there is an increasing need for enhanced technical competencies alongside more complex interpersonal skills such as problem-solving and adaptability. This evolution in required skills highlights a fundamental transformation in the auto industry’s workforce, moving away from a reliance on manual labor towards roles that demand a higher level of technical proficiency and adaptability to rapidly changing technologies.  

The Electric Vehicle Transition

A. Job Requirements for ICE vs. EV Manufacturing:

The global shift towards electric vehicles (EVs) represents another significant factor influencing job loss statistics within the US auto industry. Manufacturing EVs generally requires fewer parts and less complex assembly processes compared to traditional vehicles powered by internal combustion engines (ICE). Consequently, the labor needs for EV production are notably lower. Studies indicate that producing EVs can require 30% to 40% less labor than manufacturing comparable gasoline-powered vehicles. Some reports even suggest that this transition to EVs could potentially eliminate half or more than half of all auto jobs in the United States within the next five to ten years. Policy initiatives aimed at accelerating EV adoption, such as the proposed mandates by the Biden administration, are also projected to have a substantial impact on employment, with estimates suggesting the potential elimination of 117,000 net auto manufacturing jobs. These figures highlight the significant implications of the EV transition for the traditional automotive manufacturing workforce.  

B. Net Impact on Employment:

While the transition to electric vehicle manufacturing poses a threat to traditional jobs, it is also creating new employment opportunities in related sectors, most notably in the manufacturing of batteries and electric vehicle components. However, the net impact on overall employment in the auto industry remains a subject of analysis and concern. In Europe, for example, data from the automotive supply industry indicates a net loss of 56,000 jobs since 2020, with only 19,000 new positions created in areas linked to electric vehicle technologies, compared to 86,000 total jobs lost. This suggests that the job gains in the EV sector have not been sufficient to offset the losses in traditional manufacturing roles in the European context. In contrast, reports from the US indicate that automakers and battery producers have committed to creating over 113,000 jobs in US-based facilities since 2019 to meet the growing demand for electric vehicles. While this figure represents a significant investment in new jobs, the overall net impact on US auto industry employment will depend on the scale of job losses in ICE vehicle manufacturing and related sectors, requiring further comprehensive data to fully assess.  

The Semiconductor Shortage (2020-2025)

A. Impact on Auto Production:

The global shortage of semiconductor chips, which began in 2020 and persisted through 2023 and into 2024, had a profound impact on auto production levels worldwide, including in the United States. These chips are essential components in modern vehicles, controlling a wide range of systems from engine management to infotainment. The scarcity of semiconductors led to significant production cuts and delays across the automotive industry. In 2021 alone, it is estimated that over 11 million vehicles had to be removed from production plans globally due to the chip shortage. In the US, light vehicle production in both 2020 and 2021 hovered just below 9 million units annually, a significant drop compared to the pre-pandemic average of 11.2 million units per year. Estimates from other sources suggest that over 9.5 million units of global light-vehicle production were lost in 2021 as a direct consequence of the lack of necessary semiconductors. This substantial reduction in output had cascading effects throughout the auto industry supply chain and workforce.  

B. Related Job Losses:

The significant disruptions to auto production caused by the semiconductor shortage inevitably led to impacts on employment levels within the industry. While many of the initial responses were in the form of temporary production halts and adjustments to work schedules, prolonged periods of reduced output raised concerns about job security. The connection between production issues and potential layoffs is highlighted by the fact that events causing production disruptions, such as supply chain issues like the chip shortage, can lead to periods of idling and temporary layoffs. Data from Michigan, a key automotive manufacturing state, indicated an approximate 8% decline in auto industry employment between February 2020 and September 2021, with supply chain volatility, including the semiconductor shortage, being a contributing factor. While comprehensive data specifically quantifying job losses directly attributable to the chip shortage across the entire US auto industry during this period may be limited, it is reasonable to infer that the substantial and sustained cuts in production likely resulted in temporary layoffs and potentially some permanent workforce reductions, particularly within the manufacturing sector.  

C. Expected Resolution and Future Impact:

The global semiconductor shortage, while still presenting some challenges, has shown signs of easing in recent periods. Reports from late 2022 and into 2023 suggested that the chip supply began to improve, with expectations of continued improvement. However, some experts cautioned that shortages of certain specific types of chips could persist for a longer duration, potentially for the next 3 to 5 years. Furthermore, the underlying imbalance between the demand for and supply of semiconductors, particularly those required by the automotive industry, might continue to have lingering effects well into the future. While the most acute phase of the shortage appears to have passed, the possibility of future disruptions in the semiconductor supply chain remains a concern for the auto industry. These potential disruptions could continue to impact production levels and, consequently, the stability of employment within the sector, highlighting the ongoing vulnerability of the auto industry to global supply chain dynamics.  

Regional Analysis of Job Losses

A. Identifying Affected Regions:

The impact of job losses in the US auto industry between 2020 and 2025 has not been uniform across the country, with certain regions experiencing more significant effects than others. The industrial Midwest, traditionally a hub for automotive manufacturing, appears to have been particularly affected. States such as Michigan and Ohio have faced challenges related to both increasing automation in existing plants and the ongoing transition towards electric vehicle production, which requires different manufacturing processes and potentially fewer workers. Furthermore, projections regarding the impact of EV mandates suggest that the Midwest region, including Michigan, Indiana, and Ohio, could bear the brunt of job losses due to these policy shifts. Interestingly, Southern states like Texas and Tennessee are also emerging as significantly impacted regions. This is likely due to the increasing concentration of investments in new electric vehicle and battery production facilities in these states, leading to both job creation in some areas and potential displacement in others as the industry reshapes its geographic footprint.  

B. State-Specific Data:

Available data provides some state-specific estimates of the potential job losses in the auto industry. For example, analysis suggests that Michigan could experience the most substantial job losses due to the shift towards EV manufacturing, with one estimate projecting a loss of 25,000 jobs due to EV mandates. Indiana and Ohio are also expected to see significant reductions, with estimated losses of 16,000 and 14,000 jobs, respectively, due to the same factor. Furthermore, the potential repeal of the Inflation Reduction Act (IRA), which incentivizes EV and battery production, could lead to nearly 16,000 job losses in Michigan alone. Data from the Bureau of Labor Statistics for February 2025 shows state-level employment in motor vehicles manufacturing, providing figures such as 48.8 thousand in Michigan and 19.2 thousand in Ohio. However, to fully understand the job loss trends, these figures need to be compared with employment data from earlier years in the 2020-2025 period.  

C. Factors Contributing to Regional Differences:

The variations in job loss across different regions of the US auto industry can be attributed to several key factors. The historical concentration of traditional internal combustion engine (ICE) vehicle manufacturing in the industrial Midwest makes this region particularly vulnerable to job displacement as the industry transitions to electric vehicles. The lower labor intensity of EV manufacturing directly impacts states with a large number of ICE vehicle assembly and parts plants. Conversely, regions attracting new investments in electric vehicle and battery production, such as parts of the South, may experience job growth in those specific areas, although this growth may not fully offset losses in other automotive sub-sectors or regions. Additionally, the rate of adoption of automation technologies may vary by region and by specific manufacturing facilities, further contributing to the uneven distribution of job losses across the country.

Insights from Industry Associations and Economic Reports

A. Alliance for Automotive Innovation:

The Alliance for Automotive Innovation, a key industry association representing a wide range of automakers and technology companies, provides valuable insights into the overall state of the US auto industry, including employment. Data from the Alliance indicates that the broader automotive ecosystem supports a substantial 10.1 million jobs across the United States, contributing over $730 billion in worker paychecks in 2022. Furthermore, the Alliance highlights the significant investments being made in the electric vehicle sector, noting that automakers and battery producers have committed nearly $125 billion since 2019 to build US-based facilities, creating more than 113,000 jobs in the process. In another report, the Alliance states that the auto industry supports 9.7 million American jobs. While these figures underscore the significant employment footprint of the auto industry and the positive developments in EV-related job creation, the data from the Alliance tends to focus on overall economic impact and new job investments rather than specifically detailing net job losses across the entire sector during the 2020-2025 period. The slight variation in total job numbers reported (10.1 million vs. 9.7 million) could reflect different reporting methodologies or timeframes, necessitating careful comparison when analyzing employment trends.  

B. United Auto Workers (UAW):

The United Auto Workers (UAW), the प्रमुख labor union representing autoworkers in the US, has also provided important perspectives on job losses and the factors driving them. Reports from the UAW indicate that over 20,000 of their members at the “Big Three” automakers (General Motors, Ford, and Stellantis) experienced layoffs since November 2023. Furthermore, UAW research has explicitly warned about the potential for “considerable net job loss” due to the ongoing transition from internal combustion engine vehicles to electric vehicles. Analysts within the UAW have concluded that this shift towards EV production will inevitably lead to the elimination of many traditional auto manufacturing jobs. These statements from the UAW highlight the significant concerns within the labor force regarding job security and the potential for widespread job losses as the auto industry undergoes major technological and market transformations.  

C. Federal Reserve and Congressional Research Service:

Economic analyses from the Federal Reserve and the Congressional Research Service (CRS) offer broader perspectives on the factors influencing employment in the US auto industry. Data from the Federal Reserve in January 2025 showed a decline in overall manufacturing output, with a notable decrease in the index for motor vehicles and parts, suggesting continued challenges in this sector. Reports from the Congressional Research Service have examined the potential impacts of new automotive regulations, raising concerns that these rules could incentivize further automation within automotive plants, ultimately reducing the demand for workers. These insights from economic and policy-oriented sources provide a macroeconomic and regulatory context for understanding the employment shifts occurring within the auto industry, often pointing to potential negative consequences of policy decisions or broader economic trends on the workforce.  

Workforce Retraining and Transition Programs

A. Availability and Enrollment:

Recognizing the significant shifts in skill requirements and potential job displacement within the auto industry, various workforce retraining and transition programs have emerged across the United States. Data indicates the development of numerous electric vehicle (EV)-specific training programs at colleges and universities, particularly in key automotive states. These programs aim to equip workers with the skills needed to transition to roles in EV manufacturing, maintenance, and related fields. However, comprehensive data on the overall enrollment numbers in these programs, as well as their reach across the entire displaced workforce, is still needed to fully assess their potential impact on mitigating job losses.  

B. Success Rates and Effectiveness:

Information regarding the specific success rates and overall effectiveness of these workforce retraining programs in helping displaced auto industry workers find new employment is currently limited in the provided research material. Determining the proportion of program graduates who successfully secure jobs in the evolving automotive sector or related industries would be crucial for evaluating the efficacy of these initiatives.

C. Investment Figures:

Significant investments are being made to support the retooling of manufacturing facilities and the development of workforce training programs within the auto industry. The Biden administration has announced $15.5 billion in investments specifically dedicated to retooling manufacturing facilities to support the transition to clean energy technologies, with a strong emphasis on creating good-quality jobs in communities with ties to traditional auto manufacturing. This level of investment signifies a recognition from both government and industry stakeholders of the need to proactively address the challenges associated with workforce transition in the face of technological advancements and market shifts within the automotive sector.  

International Comparisons

A. Job Loss Trends in Other Countries:

Comparing the job loss statistics in the US auto industry with those in other major automotive regions around the world reveals that the challenges faced by the American workforce are not unique. In Europe, for instance, projections suggest a potentially significant decline in automotive jobs, with one report indicating that 500,000 autoworkers could lose their jobs by 2040. More immediate data from the European automotive supply industry shows a record 54,000 job cuts announced in 2024 alone. Since 2020, the same sector in Europe has experienced an overall loss of 86,000 jobs. These figures suggest that Europe’s auto industry, particularly its supply chain, is facing substantial employment challenges, potentially at a higher rate than what has been observed in the US during the same period based on the provided snippets.  

B. Factors Influencing Global Differences:

Several factors contribute to the variations in job loss trends across different countries within the auto industry. Shifts in global automotive production, with some regions increasing their market share while others see declines, play a significant role. For example, while the US produced fewer vehicles in 2023 compared to 2004, China’s production saw a dramatic increase during the same period. This shift in manufacturing power can lead to employment changes in established automotive regions like the US and Europe. Furthermore, global economic trends and geopolitical events also exert influence. Geopolitical conflicts can disrupt international supply chains and impact manufacturing operations across borders. Government policies related to electric vehicle adoption, trade, and labor practices can also vary significantly between countries, leading to different employment outcomes in their respective auto industries.  

Conclusion

The US auto industry experienced a complex and transformative period between 2020 and 2025, marked by significant employment shifts. The COVID-19 pandemic initially caused widespread job losses, followed by a partial recovery that did not fully restore pre-pandemic employment levels in all sectors. The increasing adoption of automation and the accelerating transition to electric vehicle manufacturing emerged as key drivers of ongoing job displacement, particularly in traditional manufacturing roles. While new job opportunities arose in areas related to EVs and advanced technologies, the net impact on overall employment varied, with some regions and sub-sectors experiencing more significant losses than others. The semiconductor shortage also played a disruptive role, impacting production and likely contributing to temporary workforce reductions. Regional analysis highlighted the industrial Midwest as particularly affected, while international comparisons indicated similar, and in some cases more severe, job loss trends in other major automotive regions like Europe.

Recommendations

Based on the analysis of employment trends and the factors influencing them within the US auto industry between 2020 and 2025, the following recommendations are offered:

• Policymakers: Should prioritize investments in comprehensive workforce retraining and education programs focused on the skills needed for the evolving automotive landscape, particularly in areas related to electric vehicles, advanced manufacturing technologies, and data analytics. Policies that support a just transition for workers in traditionally ICE-focused roles are crucial to mitigate the social and economic impacts of job displacement. Furthermore, continued support for domestic manufacturing of semiconductors and critical minerals for EV batteries can help stabilize supply chains and potentially create new jobs within the US.
• Industry Leaders: Must proactively invest in the upskilling and reskilling of their existing workforce to adapt to the changing technological landscape. This includes establishing partnerships with educational institutions and developing in-house training programs focused on EV technology, automation maintenance, and advanced software skills. Exploring new business models and opportunities within the evolving mobility sector, such as battery recycling and charging infrastructure development, can also help create new employment avenues.
• Workers: Should recognize the importance of continuous learning and actively seek opportunities to acquire new skills relevant to the future of the auto industry. Focusing on developing expertise in areas like electric vehicle maintenance, software development for automotive applications, robotics operation and maintenance, and data analysis will enhance their employability and long-term career prospects in a rapidly changing sector.