The Reality of the Green Transition: A Wake-Up Call for Business Leaders

The Reality of the Green Transition: A Wake-Up Call for Business Leaders
by Transformation Nomads

China has dominated the electric vehicle (EV) market, but it hasn't given up on traditional combustion engines. While China hasn't signed the Paris Climate Agreement, Europe is pushing hard for a green transition. But is this putting local industries at a disadvantage?

Jaguar Land Rover (JLR) is in a tough spot. The UK government's 2030 ban on gasoline cars forces the company to go fully electric. But the ambitious push towards net-zero emissions by 2039 faces serious challenges—not just in terms of energy, but jobs too.

Here's the issue: the UK is still heavily reliant on fossil fuels. In 2022, 78% of the UK's energy came from fossil fuels, and renewable sources like wind and solar made up just 20%. Even if the country adopts electric vehicles nationwide, the energy grid can't support the demand without massive infrastructure investments. Power shortages are a real concern.

For JLR, making the shift to electric cars comes with a hefty price tag. The company is already spending over £15 billion on updating production lines and developing new models. But sourcing the necessary raw materials—especially for batteries—remains a challenge. Europe's reliance on countries like China and Russia for materials like nickel means JLR and others may struggle to meet the 2030 target.

On top of that, the shift to electric vehicles will reduce manufacturing jobs. Electric cars require less labor to assemble, meaning fewer workers are needed. A typical internal combustion engine requires 30% more labor than an electric car. The UK's car industry employs 1.7 million people, and experts warn that thousands could lose their jobs. While some green jobs will be created, they likely won't make up for the losses.

The UK's move to electric cars could cost the auto industry £100 billion by 2035. JLR's £15 billion investment might not be enough unless the government steps in to improve the energy grid and help workers transition to new roles.

While the idea of going green is promising, a rushed transition could cripple companies like JLR and cause mass job losses. A balanced, gradual approach is essential to ensure the environment and economy thrive.

Transformation is necessary for companies to stay relevant, but it must be done right. Jaguar's recent rebranding shows how not to handle a transformation—it risks alienating loyal customers and eroding trust.