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The Independent Automotive Aftermarket Federation

500,000 European jobs threatened with the end of combustion vehicles in 2035

Date: Thursday 09 December 2021

Clepa, the European federation of equipment manufacturers, estimates that an industrial approach based solely on electric vehicles would lead to the loss of 500,000 jobs, saying only a more open technological approach would give the industry time to adapt.

What will be the impact of the zero-emission and thus also the 100% electric strategy desired by the European Commission from 2035? This is the question asked by Clepa of PwC Strategy&. According to the study, half a million jobs are threatened by EU plans to effectively ban combustion engine cars by 2035.

501,000 jobs are directly involved with engine equipment manufacturers or manufacturers of components for engines, which would become obsolete if the technology were to be discarded. More than two-thirds of these 501,000 jobs would disappear during the five years preceding the 2035 deadline currently being negotiated in European bodies. A speed which, according to the authors of the study, " highlights the brevity of the deadlines for managing the considerable social and economic impacts". However, the study also indicates that 226,000 new jobs are expected to be created within the production of electric propulsion (assuming that the European Union has a battery sector), which means a net loss of 275,000 jobs expected by 2040.

In this context, up to 70 billion euros of value creation linked to electric propulsion will come from the treatment of battery materials, the production of cells and modules and the assembly of battery systems.

Three scenarios
The study highlights three scenarios. The first is based on a mixed technological approach, the second on the current 100% electric vehicle approach proposed by the Fit for 55 legislative package, and the scenario is of a radical rise in electric vehicles. The three scenarios assume accelerated electrification to achieve climate goals, with a high market share for electric vehicles by 2030 of more than 50%, nearly 80% and finally almost 100%, depending on the scenarios.

"The study highlights the risks of an EV-only approach to the jobs of the hundreds of thousands of people who work hard to provide the technological solutions for sustainable mobility. Since OEMs account for the majority of manufacturing jobs in the automotive industry, it is essential that these be considered first when managing the social and economic impact of transformation. The equipment manufacturers' innovations are making electric mobility increasingly accessible to consumers and constitute an essential lever for achieving emissions reduction targets. But the needs of society are far too diverse for a single approach. A regulatory framework open to all available solutions", said Sigrid de Vries, general secretary of Clepa.

Clepa is therefore recommending that the European Commission changes its angle of approach so as not to just take into account CO2 emissions from the exhaust tailpipe, but to create a regulation based on the life-cycle and according to a well-to-wheel approach. By adding back-up energy to electrification, a mixed technological approach allowing the use of renewable fuels could allow a 50% reduction in CO2 emissions by 2030, while maintaining jobs and creating added-value, according to the study's authors.