National Associations of automotive suppliers amplify call for a manageable transition

National associations join CLEPA in calling for a technology open and job-conscious transition. Following the study’s launch – carried out by PwC Strategy& to assess the impact of three different market scenarios to reach Green Deal objectives on employment and value added among automotive suppliers across Europe in the period 2020-2040 – CLEPA’s recommendations were widely echoed across European national markets during the last week.  

The study forecasts that in an EV-only scenario, as currently proposed in the Fit-for-55 package, over half a million auto supplier jobs in the internal combustion engine (ICE) powertrain domain will become obsolete by 2040, should the technology be banned in 2035. Moreover, 70% of the job losses (359,000) will occur in just a five-year period from 2030-2035, creating tremendous time pressures for industry and regional economies.  

The study also assessed the opportunities for the EV powertrain domain, and forecasts that 226,000 new jobs will be created until 2040 – but the NET job loss will still be 275,000. Further, jobs created do not necessarily compensate those lost. Often times, they require a different skill set, are located in different regions, or generated in different companies – and also at different time periods from when the jobs are lost.  

The study also substantiates that the opportunities in the EV powertrain domain in terms of employment and value-add, are entirely dependent on a full EU battery chain materializing. Many investment are planned or occurring, however the timing of when all of the pieces will come together is still uncertain. It is also important to note that many auto suppliers are highly specialised companies consisting of SMEs and are therefore not as agile in switching business models or product portfolios.  

On the other hand, a planned and thoughtful transition consisting of a mixed technology approach keeps options open to adjust to new developments, be they technological breakthroughs, geopolitical events, or availability of resources, and at the same time, presents significant value creation opportunities in the automotive industry, one of Europe’s biggest industrial assets. 

It also protects jobs, consumer choice, and affordable mobility without compromising on climate. Through the use of accelerated electrification AND sustainable renewable fuels, the study finds that the mixed technology approach can reach a minimum 50% CO reduction in 2030.  

The study results were endorsed by various national associations representing the automotive supply chain, who joined the call to action for a green AND just transition.  

 Jean-François Le Bos, president of FIEV, spoke on behalf of the French suppliers: “At the request of CLEPA, a study carried out by PwC Strategy& once again highlights the strategic error of choosing electric power alone for the vehicles of tomorrow. Indeed, the results of this new scientific assessment once again point to the threat of a social disaster on the one hand, and an environmental nonsense on the other, that would constitute the scenario of an industry focused exclusively on electric vehicles. More than ever, the FIEV, speaking on behalf of the French automotive suppliers, insists on the importance of technological neutrality and the need to consider road transport emissions “from well to wheel”, at least initially, as the analysis of the life cycle of a vehicle is much more complex to implement. The FITfor55 package should be an opportunity to bring the whole regulatory framework on transport GHG emissions into line. Let us dare to make it a strength, rather than a threat! 

The German VDA issued a statement through its president Hildegard Müller, who said: “The automotive industry will deliver climate-neutral mobility by 2050 at the latest. German companies are investing around 150 billion euros in future technologies over the next few years. Nevertheless, technology openness and innovation must be the basis of any supportive policy framework in the coming decades. The new study underlines that Germany is well positioned to attract investment in electromobility, which is crucial for future employment opportunities in the sector. The transformation is nevertheless a major challenge for the 130,000 people currently employed in the powertrain sector of automotive suppliers. Europe and Germany must support companies in the transformation process and especially in qualification measures so that as many employees as possible keep their jobs in the industry. Only a socially designed transformation can be successful in the long term – so that Germany then remains the car country of Europe. This is the result of hard work and high risks taken by SMEs in particular. They remain the backbone of the German supplier landscape and the entire industry. That is why they need the full support of the new Federal Government in their multi-dimensional transformation process. It must be ensured that the European Green Deal does not ban any technologies and not only supports the introduction of e-mobility, but also creates incentives for investments in hydrogen and e-fuels. The automotive industry is preparing for the climate-neutral future.”  

For the Italian market, the President of the ANFIA Components Group and ANFIA Vice-President Marco Stella stressed that: “The components supply chain in Italy today has a significant economic and employment weight, considering that the products of this sector are exported and appreciated all over the world – the trade balance is positive for about 5.5 billion € per year. The Italian and European supply chain is strongly integrated at international level, a feature that the European approach to decarbonisation of mobility must take into account, recalling the strategic importance of defending the competitiveness of the sector for the future of our industry and, ultimately, of our economies. Supporting component manufacturers in Italy in tackling the transition to zero emission mobility also means understanding the current difficulties faced by about 30% of them, who are still focused on internal combustion engine technologies, and, in general, by SMEs, which represent the majority of the sector, in taking on huge investments in the space of a few years”. 

Speaking on behalf of Polish automotive suppliers was Tomasz Bęben, managing director of SDCM: “This conclusion should be taken into account by Polish decision-makers who opt for a rapid shift of the automotive sector to electromobility:  the resulting reduction of jobs in the automotive industry may affect our country to a greater extent, because a significant part of enterprises from this sector are relatively small companies with domestic capital”. 

The President of the Portuguese AFIA – Association of Manufacturers for the Automobile Industry, José Couto, said that: “The study prepared by CLEPA, in which AFIA played a very active role, shows the medium and long-term impact of the energy transition process in the companies of the automotive components industry. This industry in Portugal employs 62,000 workers, 8.8% of the manufacturing industry employment, most of them qualified and with remunerations above the national average. So in this context it is necessary that the European Union creates instruments that allow to face the trends imposed by the energy transition and the digital transformation, in order to protect jobs and companies”. 

Finally, from Spain the General Director of the Spanish Association of Automotive Suppliers (SERNAUTO), José Portilla, said: “We are pleased to be able to present this first important study on the impact of electrification on employment, prepared by CLEPA, the European Automotive Components Association, in which SERNAUTO has played a very active role. The components sector in Spain directly employs 225,000 people, of whom 72,000 are related to the internal combustion engine propulsion system. This study anticipates the potential evolution of employment in this process of ecological and technological transition in which the automotive sector in Spain is immersed, and in a relevant way, the sector of component manufacturers, and provides a medium and long term perspective of the impacts of these processes on employment”. 

The press release is available in eight different languages here


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