Forvia, a French autoparts supplier, said today that it will cut 10,000 jobs as it looks to lower costs and keep up with EU regulations pushing the industry toward more electric alternatives, according to the Wall Street Journal.
The job cuts, which will take place over the next five years and save a projected 500 million euros ($540 million) each year starting in 2028, will be felt globally. Half of all cars around the world have Forvia parts, including those made by major U.S. companies like Tesla and Ford. Forvia supplies mainly for vehicle interiors and emission systems.
Beyond an industrywide transition from gas-powered vehicles to electric varieties — which has come with its own challenges and recalibrations as of late in the U.S. — Forvia is also trying to distance itself from China by improving its profitability in Europe. Currently, the company makes 27% of its sales in China, according to Electrek.
China’s growing dominance in the EV space
Last year, Chinese electric vehicle maker BYD dethroned Tesla as the world’s biggest seller of electric vehicles. And it’s not only on pure sales that BYD is catching up with its American competitor. In terms of how much profit each company makes per vehicle, BYD is also gradually eating into Tesla’s lead.
Tesla is trying to stay competitive by reducing its prices, especially in the winter months when “most people don’t love to buy cars,” as CEO Elon Musk put it last week. But China still remains a looming threat to profitability in the U.S. and in the EU.