Chinese auto industry observers are pushing back against the idea that artificial intelligence is driving mass layoffs in the sector, arguing that many workforce reductions are rooted in business pressures rather than automation. Liu Songbo, vice dean of the School of Labor and Human Resources at Renmin University of China, told Chinese outlet D1EV that while AI will affect employment, many companies are "whitewashing" operational layoffs as AI-driven transformation.
Liu's comments come as the auto industry grapples with a sharp profit decline. According to China's National Bureau of Statistics, the automobile manufacturing sector posted total profits of 195.35 billion yuan (about $27.5 billion) in the first half of 2026, down 19.5 percent year-on-year. That squeeze is forcing automakers to rethink costs, product lines, and staffing, often through plant closures, business contraction, and voluntary redundancy packages rather than openly announced layoffs.
AI's real impact: changing workflows, not just cutting jobs
While AI is not the primary driver of most layoffs, it is changing how work gets done inside automakers. Changan Automobile, for example, uses an AI assistant to review supplier corrective-action reports, cutting the time from about 30 minutes to around two minutes per report, according to Li Ning, deputy general manager of Changan's quality department. The AI handles standardized information extraction, while engineers focus on judging results and communicating with suppliers.
Consultancy Deloitte found that over 80 percent of mainstream automakers have launched generative AI pilots, but only about 15 percent have achieved scaled deployment. Deloitte calls this the "pilot dilemma," where AI tools are scattered across departments without connecting to core business processes. Geely, by contrast, has deployed more than 160 AI assistant roles and 600 AI skills, executing over 130 million tasks and generating an estimated annual economic benefit of over 1 billion yuan (about $140.8 million), according to D1EV.
Wang Xianbin, vice president of Gasgoo Auto Research Institute, said AI's reshaping of the auto industry chain is not partial but full-chain, affecting product definition, R&D, manufacturing, supply chain management, and after-sales service. But he stressed that AI-defined cars require restructuring entire processes and organizational architectures, not just adding tools.
Skill demands shift as automakers hire for AI era
The changing nature of work is altering hiring and training. Geely hired more than 4,000 fresh graduates in 2026, while Xpeng plans to raise its campus-recruitment share from 50 percent to 70 percent, citing younger workers' faster adoption of new tools. Changan has designated intelligentization, new energy, and software as priority talent areas, with its 2026 campus recruitment plan expected to grow by over 30 percent.
Structural talent gaps are acute. According to a 2025 report, the new-energy vehicle industry faces a talent shortfall of 1.03 million people, with intelligent-driving engineers particularly scarce—the supply-demand ratio is just 0.38, meaning roughly three positions compete for one qualified candidate. Li Zheyue, secretary-general of the China Talent Research Society's auto talent committee, notes that the ability model for auto professionals has shifted from problem-solving to complex problem-solving, from learning to fast learning, and from imitative to pioneering innovation.
Li Linfeng, CEO of Haiwei Technology, envisions a future where a single outstanding employee directs 30 to 50 AI agents, handling what used to be a whole business unit's workload. Such "all-round employees" need strong logic and broad knowledge to judge AI outputs and coordinate execution, he told D1EV. The message from industry experts is clear: AI will not eliminate jobs wholesale, but it will redefine who does what, and those who adapt will thrive.
