CAR STUDY:
Tightening of EU - CO2 Requirements
and the effects on Jobs in theEuropean Auto Industry

CAR-Center Automotive Research, Ferdinand Dudenhöffer
1

Contents

Planned EU tightening of CO2 requirements endangers jobs in the European auto industry
less than feared – in contrary: across all sectors positive effects on employment can be expected.

Summary4

1. Introduction
2. Outline of the Study- Expected Employment Effects

6-7

3. Regulatory Environment

8-9

3. Fuel Saving Technologies driven by CO2-Regulation

10 - 11

3.1 Positive Job-Effects of Stronger Regulation

12 - 13

3.2 Ban of Combustion Engines in Important Markets

14

3.3 Ban of Combustion Engines Germany

17

3.4. Carmaker by itself announce Exit Strategies

18

3.5. Battery Cell Manufacturing Sites in Germany and Tesla add
more than 30,000 Employees

19

3.6. Innovations in Lithium-Ion-Batteries will make Plug-In
Hybrids a Thing of the Past

20

4. The Model

22

4.1. The Model Mix in 2030

234.2. Employment-Effects in Germany
4.3. Employment-Effects in France
4.4. Employment-Effects in Italy
4.5. Employment-Effects in Spain
4.6. Employment-Effects in Slovakia
5. Conclusion
References

Ferdinand Dudenhöffer 1,2

1-3

SUMMARY
The EU Commission is planning to further reduce the level of CO2 emissions from new passenger cars. Under the planned requirements, only 47.5 grams CO2/km would be allowed per new
car from 2030. If this number is exceeded, high penalties are foreseen for carmakers.
Within a static microeconomic model, we analyse the effects of this stronger regulation on
employees in the automotive industry in five EU automotive countries (hereinafter referred
to as the Group of 5): Germany, France, Italy, Spain, Slovakia as well as the Group of 5. The
Group of 5 stands for 70% of total manufactured passenger cars in EU 27 in 2019. The model isbased on an analysis of two vehicle types and applies industry data from 2019 and 2020.
The results show that the strengthening of CO2 emissions targets will have only negligible
negative employment effects for the automotive industry. The calculated effects of the model
are summarised in Fig. 1 below.

24 - 27
28 - 29
30 - 3133
34 - 35
36 - 37
38

Fig. 1: How stronger CO2 standards will effect employment (in 1.000 employees)
1.600

1.464

1.400
1.200

2,1 %

We would like to thank the European Climate Foundation for financial support, which allowed us to implement
the study in the present design, in two language versions (German/English) and by purchasing data for thecountries France, Italy, Spain, Slovakia.

2

1,9 %

1,9 %

1,6 %

814

1,5 %

1 ,0%

600
400

229

200

176

163

0,5 %
81
0,0 %

0

Germany

FranceItaly
Employes		

1

2,0 %

1,8 %

1.000
800

2,1 %

2,5 %

2

Spain

SlovakiaGroup of 5

Reduction in Share

PROF. DR. FERDINAND DUDENHÖFFER IST DIREKTOR OF CAR-CENTER AUTOMOTIVE RESEARCH, DUISBURG.
FERDI.DUDENHOEFFER@CAR-FUTURE.COM

1

@ Marek Piwnicki

The blue bars in Fig. 1 indicate the number of employees within the motor industry in import-

The accelerating shift towards battery electric vehicles has risen up the agenda of the manu-

ant EU-car-manufacturing countries in the years 2019 and 2020. The total impact varies bet-

facturers. In early 2021, GM announced that they will produce only electric vehicles from 2035.

ween 1.8% (Germany) and 2.1% (Spain). According to our model, 1.9% of today’s jobs would

Volvo has announced to stop the production of internal combustion engines by 2030 and

be no longer be needed within the Group of 5. To put it in a broader perspective, even in the

Jaguar Land Rover from 2025. Importantly, VW has promised that 70% of all new passenger

simple model of an isolated industry, it is hard to show negative effects on employment. As

cars sold in Europe by 2030 will be battery electric cars.

our analysis applies a microeconomic static single sector model, effects from other sectors,
as well dynamic competitive advantages have to be added.

It is clear that the race towards zero emission mobility is accelerating. For these reasons, also
a stronger Euro 7 emission regulation, which currently is under discussion, would not be a

Economies of scale create important competitive advantages in the automotive industry,

disadvantage. Automotive manufacturers will define the pace, the supplier industry need towhich includes countries and regions. If the transformation to zero-emission passenger cars

speed up to avoid job and turnover losses.

arrives late, Europe will be in a situation of competitive disadvantage relative to Asia andNorth America. This jeopardises jobs of the future. Therefore, we have taken into account job

In conclusion, the strengthening of CO2 emission performance targets and the subsequentlosses due to an old technology like combustion burning vehicles and also the loss in creatingtransformation will improve the competitive position of the European automotive industry.

new jobs for the industry of tomorrow, like battery cell manufacturing. Considering this oppor-

From a broader industrial perspective, the overall positive effect on employment is substanti-

tunity costs, there is a positive job creation effect due to the stronger EU-emission-rules.

al and an improvement of CO2 standards will create jobs, as has been historically demonstra-Moreover, studies, such as Cambridge Economics, point to considerable positive employment

ted.

effects in other sectors, following a transition of the car industry. This includes sectors, such as
construction, power, services and several manufacturing sectors.
23

1. Introduction@ Maxime Agnelli

Following the implementation of the EU Regulation 2019/631, CO2 emission performance standards for new passenger cars and light commercial vehicles became effective in the EU on 17
April 2019. From 1 January 2025, the following EU-wide CO2 emission performance standards
will be implemented:a.) for the average emissions of the fleet of new passenger cars, an EU-wide fleet CO2
emission target standard will be applied, which corresponds to a reduction of the target
for the year 2021 by 15% ...
b) for the average emissions of the fleet of new light commercial vehicles, an EU-wide fleet
target standard will be applied corresponding to a 15% reduction in the 2021 target….
From 1 January 2030, the following EU-wide fleet targets will be effective:a.) for the average emissions of the fleet of new passenger cars, an EU-wide fleet standard
will be applied, which corresponds to a reduction of the target for the year 2021 by 37.5%...
b) for the average emissions of the fleet of new light commercial vehicles, an EU-wide fleet
target standard will be applied, which corresponds to a reduction of the target for theyear 2021 by 31% compared to the year 2021 ...
However, in mid-September 2020 the European Commission announced:„To achieve a climate-neutral EU by 2050 the intermediate target of an at least 55% net
reduction in greenhouse gas emissions by 2030, the Commission is proposing to revise theregulation“.
				

www.ec.europa.eu

According to a communication from the Commission, the corresponding change to Regulation EU 2019/631 is planned for Q2, 2021.

4

New EU CO2Regulation
2019/631

2. Outline of the Study - Expected Employment Effects
What is the effect on employment that can be expected in the European automotive industry
from above mentioned strengthening of the CO2 emission performance targets?
To answer this question, we will concentrate on major European countries with a strong automotive sector: Germany, France, Italy, Spain and Slovakia. To study the effect on employment,
we apply an idealised model that assumes two different passenger car types. The effect on
employment in the automotive industry in United Kingdom was excluded, due to the withdrawal from the European Union and associated upheavals.
Our analysis focused on the passenger car market and excludes light commercial vehicles, forthe year 2030.

2030
crucial year
@ Sara Kurfeß3. Regulatory Environment@ Volkswagen AG

Fig. 2 shows the former CO2 targets and EU car fleet results. For example, for the year 2008, a
CO2 target of 140 g CO2/km was formulated as a voluntary commitment by car manufacturers. The target was missed, and the CO2 emissions achieved were 160 g CO2/km on average.
In reaction, the EU Commission formulated the CO2 target of 130 g CO2/km to be effectivefrom 2015, i.e., if carmakers would not meet the regulation standard strong penalties would be
imposed.
The result of the 130 gCO2/km target was an innovation boost, with fuel-saving technology
flowing into large-scale production. Fig. 3 shows examples of innovations that were taken into
mass production between 2010 and 2015. Lightweight construction became more important,start-stop systems went into series production, 3-cylinder engines and the downsizing of internal combustion engines became the trend, shift point displays and much more. Fig. 2 showsthe effects of the fuel-saving innovations that have made a significant contribution to reducing fleet consumption through the EU CO2 requirements. During a seven-year period, from2008 to 2015, the fleet consumption and the corresponding CO2 emissions were reduced from
160g CO2/km to 120g CO2/km. The goal was clearly exceeded.

Fig. 2: CO2-Emissions passenger cars EU 28(in Gramm CO2 pro km) (NEFZ-Cycle)

Remarks:
180

The method of measuring CO2-emission had been until 2019 the so called

160

NEFZ-test-procedure. (NEFZ: Neuer Europäischer Fahrzyklus). Meanwhile,

140

WLPT cannot translated with a fixed coefficient into NEFZ and vice versa. Due to agreements with the industry the NEFZ test will be decisive formeeting the emission standards. Therefore, we apply to our model NEFZmetrics.

Average gCO2/km

so called WLTP test is defined and binding for measuring CO2-emissions.

130

120
100

121,8

80

EU-Target

60

118,1

CO2-Emissions (NEFZ)

40

Target 2021
95 g/km120,4Targets

Target 2030
59 g/km

47,5 g/km

20

Sept.
2020
von der
Leyen@ Volvo

30
20

21
20

20

19

20

18

20

20

17

16

20

20

15

14

20

20

13

20

12

11

20

20

10

09

20

20

08

07

20

06

20

20

05

04

20

20

03

02

20

01

20

20

20

00

0

SOURCE: EU-COMMISSION, CAR

9

Fig. 3: Fuel Saving Technologies driven by CO2-Regulation

AMG battery
engine hoodcarbonshift points
displayslong gear ratio
Lightweight seats

Downsizing(1,4l/125 kW)

smooth running
tires

Start - Stop
Function

mirror replacement
heat storage@ Volkswagen AG

@ Michiel Annaert

3.1. Positive Job-Effects of Stronger Regulation
Despite a series of claims and reports from automotive sector, neither passenger car prices
nor employment was negatively affected by the CO2 emission performance standards regulation. Passenger cars remained affordable, and the employment increased, such as in theGerman automotive sector.
Fig. 4 shows that in the period 2007 to 2015, the number of employees in the German auto industry increased from 726,000 to 839,000 – a growth of 15%. Strengthened CO2 targets have
led to the opposite of what the industry has suggested, with further innovation, and a corresponding increase in the number of employees.
These are striking examples, which demonstrate that stricter regulation has fostered innovation and gave a competitive advantage to the industry. What has been seen in the past should
also be visible in the future.

Positive
Job-Effectsof Stronger
Regulation

ries with an annual production of 16 million cars - based on the year 2019 - and 1.7 million employees in the automotive industry have decided to phase out the internal combustion engine.

3.2. Ban of Combustion Engines in Important Markets
3.2. Ban of Combustion Engines in Important Markets As with environmental standards implemented so far, announcements to phase out the internal combustion engine have had
a similar effect. There are clear regulatory frameworks that create predictability, stimulate

There is international pressure that drives electric vehicles. The faster Europe steps in, thebetter for industry. This is equivalent with establishing economies of scale fast and for fasterprogress we´ll need stronger regulation.

investment and make the transformation calculable.
Fig 4: Employment German Car Industry (in 1000 jobs)
850
778

800

798

807

839

826

4.301

749

750

Employment +15%

726

723

700

Fig. 5: Car Markets with 15.6 Mio. Sales will Ban Combustion Engines
Passenger Car sales (in 1000 vehicles in 2019)2035

from 2007 to 2015

701

2040

2040

2040

2035

Date for Ban

2035

2035

CO2-Emissions -25%
from 2007 to 2015

2030

2030

2030

650

2030

2030

2030

73

12

2025
2.311

600

1.921

2015

1.892

SOURCE: VDA, CAR

1.1259446

The announcement of an exit from the internal combustion engine is a clear investment signal

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bustion engines. Investments promise long-term profits selling charging power.

U
ni
te
d

service providers for best location for charging stations will start with an agenda to ban com-Japdate will be predictable, which will initiate competition. Some kind of race between the poweran

for the power sector. The demand for electricity for battery-electric cars from the phase-out

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2013

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2012

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2.214

SOURCE: CAR

At the end of 2019, Japan had announced that it would be phasing out combustion engines
for new vehicles from 2035 as shown in Fig.5. Japan is a significantly more important car nation than Germany. With car production of 8.33 million new cars, Japan was the third largest
car manufacturing country in the world in 2019, behind China and the US.
In automotive producing countries, such as Japan, Spain, Canada, France, UK or the Netherlands, exit data are defined. In these countries it is clear how high the demand for electriccars will be from the year of the phase-out. Car manufacturers can estimate the demand forelectric passenger cars precisely, with significantly less risk and thus higher investment security. The same applies to battery manufacturers and suppliers. Worldwide, automotive count-

1415

3.3. Ban of Combustion Engines Germany

25% of the
new carswould beaffected

One argument that is put forward repeatedly is that jobs would be endangered in the German
auto industry with a fixed exit date for internal combustion engines. Is this argument viable?
The fear of the switch marks the mood among German politicians and trade unions. They
want the electric car, but in such a way that the jobs for combustion engines are preserved:
squaring the circle. In 2019, 1.699 million people were employed in the five major car nations
with an exit date and 832,000 people were employed in the auto industry in Germany. The job
argument would - if it actually existed in its hard form - affect 1.7 million people.
How much could an exit from combustion engines in Germany affect employment in the auto
industry? Domestic car production is decisive for this. According to the VDA, 3.99 million carsor 75% of the new cars produced in Germany were exported in 2019. With a fixed exit date forcars in Germany, “only” 25% of the new cars produced in Germany would be affected. For
Germany, the arguments in Fig.6
Fig. 6: Automotive Nations with Exit-Strategy in Comparison@ Nelson Ndongala

Exit datecombusionengines

Passenger car
production 2019
(in Mio. Units)

Car-sales 2019
(in Mio. Units)

Employees Car
Industry 2019
(in 1000)

Japan

2035

8,33

4,30

910

Spain

2040

2,25

1,26

156

Canada

2040

1,96

1,92

130

France

2040

1,68

2,21

221

United Kingdom

2035

1,30

2,31

166

Schweden

2030

0,27

0,36

90

Netherlands

2030

0,18

0,45

26

Total

16,0

12,8

1.699

Germany

4,66

3,61

832

SOURCE: CAR, NATIONAL ASSOCIATIONS

17

Fig. 6 include production volumes of Opel and Ford as well for exports. At the same time, a fi-

The automotive industry itself seems not believe in the future of combustion engines in pass-xed exit date would ensure that the German carmakers align themselves to domestic demandenger cars. Announced planned regulations, such as the Euro 7 vehicle emission standards,

and therefore ensure their production facilities are geared towards battery electric vehicles.

will speed up this transition further. To establish the structures for electric vehicles fast will bedecisive for the future of the European car sector.

3.4. Carmaker by itself announce Exit Strategies
During the last months carmakers started to define and announce exit strategies for internal
combustion engines, as shown in Fig. 7.

3.5. Battery Cell Manufacturing Sites in Germany and Tesla
add more than 30,000 Employees
Ahead of the transformation process starts in the engine and transmission manufacturing

Fig. 7: Carmaker with Exit-Strategy for Combustion Engine

Exit announced
by carmakers

Remarks

centres, another phenomenon can be observed in Germany: foreign direct investments in cell
factories and cell assembly. The following plans have been announced or in development:
1. CATL 16 GWh cell factory in Erfurt with expansion plans up to 100 GWh
2. sVolt - 24 GWh cell factory and module assembly in Saarland
3. Northvolt Zwei and VW- 40 GWh cell factory in Salzgitter

Bentley

4. Farasis - 6 GWh with expansion plan to 10 GWh in Bitterfeld

2030

5. Automotive Cells Company (ACC) PSA-Total -24 GWh in Kaiserslautern
Daimler

Ford

General Motors

k.A

2039 only CO2-neutral new cars

by July 2021 in first construction phase2030 for
Europe2035

6. Tesla Gigafactory - car factory and cell production with 12,000 employees

Even with conservative calculations, the plants that will be fully operational by 2025 at the
In 2025 GM to sell 1 Mio. BEV

latest will employ more than 35,000 people in total, excluding wider employment effects inmechanical engineering and electrochemistry in Germany. The feared job loss as a result ofHyundai-Kia

k.A

1 Mio. BEV sales for 2025

the transformation starts in Germany with a major positive employment impulse that was nottaken into account in many assessments in the past.

Jaguar Land Rover

2025

This is the status of 2020. It can be assumed with a high degree of certainty that this is by no
Porschek.A

Renaultk.A

Toyota2050
CO2-neutral

In 2030 Porsche to sell 80 % EV

In 2025 Renault to 30 % BEV

means the final result, but rather an interim result. Therefore, it cannot be ruled out that thetransition to electromobility could have a similar effect as the strengthening of the CO2 regulation in the year 2000, with the stipulation that the fleet consumption of 130 g CO2 / km had
been achieved by 2015. These positive employment effects are shown in Fig. 4.

Volkswagen

k.A

In 2030 VW to sell 70 % BEV in Europa

Volvo

2030

In 2025 Volvo to sell 50 % BEV

VW-Konzern

k.A

In 2030 VW-group to sell 30 % BEV

To conclude, we should not just concentrate on a small model-calculation focusing on substitution combustion engines with electric drivetrains. We have to take into account the wholeprocess and therefore expect that fast transformation triggered by stronger regulation willshow the same effects as described in sections 3.0 and 3.1. Innovations, substitution and disruption will create new jobs.

SOURCE: PRESS ANNOUNCEMENTS BY CARMAKERS

18

19

3.6. Innovations in Lithium-Ion-Batteries will makePlug-In Hybrids a thing of the Past
Considerable advances in electrochemical power storage systems can be expected in thenext decade. Solid-state battery cells offer the biggest technological advancement, withimprovements anticipated for charging time, energy content per kg, number of cycles, safety
and costs. These may allow solid-state batteries to support a driving range of 1000 kilometres,with a battery pack weight that is in the order of magnitude of today‘s 400 km range for midrange vehicles. The US start-up QuantumScape, in which the VW Group has an equity stake,as well as Toyota (Toyota‘s game-changing solid-state battery en route for 2021 debut - Nikkei
Asia) and Samsung (High-energy long-cycling all-solid-state lithium metal batteries enabled
by silver – carbon composite anodes | Nature Energy) went public with the first information on

Innovations will
make Plug-In
Hybrids
a thing of
the Past

solid-state batteries. When these innovations are implemented, the charging and range comfort of fully electric vehicles will be equivalent to those of today‘s diesel passenger cars.
Continuous improvements in LFP and Cobalt-Nickel-Manganese cathodes, as well as siliconbased anode material already result in significant performance improvements. Near future
battery technology introductions, such as the 4680 cell from Tesla, or blade batteries, willfurther improve battery costs and energy density. We are convinced that, as a result of thehigh level of technical progress, plug-in hybrids will no longer be marketable before 2030 due
to high costs, expensive exhaust gas cleaning and rising CO2 taxes and we therefore do notinclude plug-in hybrids in our model.

@ Marc Heckner

20

4. The Model

4.1. The Model Mix in 2030

In a model analysis, which is based on the framework conditions of the EU 27, we simulated

Fig. 8 summarises the results. In our model, in 2020 with the 95 g CO2 target, 5,4% of new cars

the effects of a tightening of the CO2 requirements. The starting position is the 2019 EU CO2

in EU 27 must be fully electric vehicles (BEV). According to the previous requirements of EU

guidelines with 130 gCO2/km per average car.

Regulation 2019/631, only 59.4 gCO2 / km are permitted in the fleet average for 2030.

Fig. 8 illustrates the structure of the model and the key assumptions it makes. The framework

Fig. 8: Car Market EU 27 (in 1.000 units)

is the EU 27 car market, which fluctuates at around 12.7 million car sales per year on a longterm average.

X

8.000

19
20

18
20

17
20

16
20

15
20

14
20

13
20

12
20

11
20

10
20

09
20

20

00

lysis.

08

5.000

with 0 < x < 1

20

nalties still rely on NEFZ-test results. Therefore, we applied the NEFZ- procedure for our ana-

Nearly saturated market with12.7 mio. car-sales in average

07

6.000

BEV
0g CO220

Despite the fact that CO2-measurement will be based on the new WLTP-test-procedure, pe-Ø PKW
100,4g CO2

06

The CO2-emissions of the two car-types are measured according to the NEFZ-test procedure.

7.000

1-X

20

9.000

05

had been fulfilled.

9.613

20

10.00004

EU 27 were BEV. This means that 1-x = 0.054 applies for 2020. The CO2 requirements in EU 27

13.029Modell20

11.00003

Fig. 8. The second type of vehicle is a BEV with 0 g CO2/km. In 2020, 5.4% of new cars in the20

12.00002

CO2/km car. In 2020, 94.6% of all new cars in EU 27 had been of this typ. Thus x = 0,946 for20

13.00013.132

01

In the model we assume that there are two types of vehicles. The first type of vehicle is a 104g

13.13020

14.000SOURCE: ACEA, CAR

The reference point in time for the model is the year 2030, considering two potential versions
Fig. 9: Modell-Mix 2030of the new CO2 fleet targets being in place:
1. the original regulation target of 59.4 gCO2 / km

BEV Share

EU market (cars)

BEV (cars)

BEV in 2020 with 95 gCO2/km

5,4 %12.700.000

685.800

BEV in 2030 with 59,4 gCO2/km

40,9 %

12.700.000

5.187.963

BEV in 2030 with 47,5 gCO2/km

52,7 %

12.700.000

6.692.900

Additional BEV due to tightening

11,8 %

12.700.000

1.504.937

2. a revised regulation target of 47.5 gCO2 / km that is proposed to become effective afterEU 9/2020 (see chapter 1. Introduction)
Two questions arise:
1. How many additional BEVs must be sold to meet the proposed stronger standard of 47.5 g
CO2/km (change in the mix)?
2. What employment effects will result according to our model for the countries??
a.) Germanyb.) Francec.) Italyd.) Spaine.) Slovakia

The model assumes that plug-in hybrids will hardly play a role by 2030. This is also because
great advances in battery storage technology are to be expected. (see also sections 3.5 and 3.6)
22Additional cells at 60 KWh per vehicle

90 GWh23

With the 9/2020 proposal of the EU Commission of 47.5 gCO2 / km, our model shows that a
BEV share of 52.7% or 6.692.900 fully electric new vehicles, are necessary to meet the more
stringent fleet target. The model also shows that due to the stricter fleet targets, 1.504.937
BEVs must be sold in addition. This answers question 1 in section 4.

1.504.937

BEV

1. How many BEVs will have to be sold as a result of the proposed tightening(change in the mix)??
- Answer: 1.504.937 BEV
At the same time, the need for battery cells is increasing. With an assumed battery capacityof 60 kWh per new car, the tightening of regulation would mean an additional lithium-ion cell
capacity of 90 GWh. In other words: More than one Giga factory from Tesla in Fremont in their
final stage of 55 GWh. The total investment should then be 9 billion euros for the additional
cell capacities, based on the Panasonic-Tesla figures. If we take into account the related jobs
in battery cell manufacturing and assembly, the reported 90 GWh would correspond to an
additional 25,000 jobs.

4.2. Employment-Effects in Germany
In the next step, let‘s take a look at how the more ambitious of CO2 requirements in 2030 willaffect car production in Germany. We take the car production figures for 2019 as a referencedate, as shown in Fig. 10 below
Fig. 10: Production-Effects for Germany

20192019 Share

Car-production Germany (in units)4.663.749

100,0 %

Car-production Germany allocated to EU (in units)3.108.539

66,7 %

Germany: Additional BEV due to EU tightening in %11,8 %

11,8 %

Additional BEV due to tightening allocated to EU(in units)368.359

11,8 %

Share additional BEV in car-production Germany

7,9 %

7,9 %
@ Jorgen Hendriksen24

A total of 3.1 million cars were produced in Germany in 2019, which were sold in the internal

However, this does not take into account that further battery cell production has to be or-market (EU 27). In our model calculation for the tightening of CO2 emissions (Fig. 9), an addi-

ganised and that green electricity is necessary for cell production. Furthermore, additionaltional 11.8% of electric cars are required due to stricter emission requirements. This results incharging stations and wall boxes will be required, and electric cars will generate additional

the 368,359 additional electric cars mentioned in Fig. 10. Measured against car production insales, with a positive impact on jobs in wind and solar power generation. In summary, we doGermany, that is 7.9% of total car production, a manageable number.

not predict a negative workplace effect in the German auto industry.

At the end of April 2020, the automotive industry in Germany had 814,000 employees. Let us

Additional positive effects from the transition to e-mobility, such as increased exports ofnow make a first, very simple estimate of how an additional 7.9% electric cars or fewer com-

electric cars from Germany, have not been included in the analysis. The longer the Germanbustion engines in production can affect jobs. It is an upper limit that we are now defining

auto industry concentrates on „combustion engine drives and plug-in hybrids“, the weaker its

because not all jobs are affected by electromobility.

international competitive position will be. Much like the Tesla Gigafactory in Grünheide, theGerman auto industry is gaining potential and strength.

Fig. 11: Employment-Effects Germany
Conclusion: We do not expect a negative effect on the employment in the German car industry due to stricter EU requirements. The opposite is, in fact, the case, as Section 3.1 has shown;Apr 20

Employment Car Industry Germany

814.000

Share added value powertrain

35 %35% of employees allocated to powertrain

284.900

6,1% less employees due to fewer ICE 2030 by stronger CO2

22.502

Share of replaced manpower from total employment

2,8 %Net-Reduction Jobs 66% (without battery-cell-production)

14.852

Net-Reduction Jobs 66% share on total

1,8 %An upper limit for jobs that could arise as a result of the tightening would be 2.8% of the total
number of employees in the auto industry or 22,502 jobs. At the same time, the additional
electric cars also need electric motors, power electronics, battery modules, cells and so on. If
one assumes that two thirds of the jobs in the powertrain production are eliminated - which ismore of an upper limit if the jobs necessary for the electric drive train are offset – 14,852 jobs
are still at risk from the tightening.

an increase in employment in Germany can be expected.

Effects
in Germany
@ KIA

26

27

4.3. Employment-Effects in France

Fig. 13: Employment-Effects France

Similar to the analysis for Germany, we analysed the job effects for France within our model.

2019

Based on the 2019 car production figures in France, the car production effects shown in Fig. 11
result.

Employment Car Industry France

229.422

Share added value powertrain

35 %35 % of employees allocated to powertrain

80.2986,1 % less employees due to fewer ICE 2030 by stronger CO2

7.542

Share of replaced manpower from total employment

3,3 %Net-Reduction Jobs 66 % (without battery-cell-production)

4.978

Net-Reduction Jobs 66 % share on Total

2,2 %Fig. 12: Production-Effects for France

2019

2019 Share

Car-production France (in units)

1.675.198

100,0 %

Car-production France allocated to EU (in units)

1.327.805

79,3 %

France: Additional BEV due to EU tightening in %11,8 %

11,8 %

Additional BEV due to tightening allocated to EU(in units)157.343

9,4 %Share additional BEV in car-production France

9,4 %

9,4 %

Conclusion: We do not expect a negative effect on employment in the French car industry
A total of 1.33 million cars were produced in France in 2019 and sold in the internal market (EU27). In our model calculation for the tightening of CO2 emissions (Fig. 8), an additional 11.8% of

due to stricter EU requirements. The opposite is the case, as section 3.1 has shown for the preceding analyses, an increase in employment can be expected.

electric cars are required due to the tightening of the CO2 fleet standards. This results in the157,343 additional electric cars mentioned in Fig. 12. This corresponds to 9.4% of the total car
production in France.
Fig. 13 shows how the additional 157,343 fully electric cars affect employment in the present
model. The present model results in a loss of 4,978 jobs for France.
This calculation does not take into account that further cell production is necessary, thatgreen electricity is necessary for cell production, that additional charging stations and wallboxes are needed, nor that electric cars will generate additional sales, with a positive impact
on jobs in wind and solar power generation. In summary, we do not predict a negative impact
on jobs in the French auto industry - even with a strict analysis. A previous Cambridge Econometrics analysis and other studies indicate considerable positive employment effects inthe construction, electricity, hydrogen, services and many manufacturing sectors due to thetransformation of the car industry.
28

29

4.4. Employment-Effects in Italy@ carlos aranda

Analogous to Germany and France, Fig. 14 and Fig. 15 show the effects to be expected for Italy
according to the model.
Fig. 14: Production-Effects for Italy

2019

2019 Share

Car-production Italy (in units)542.007

100,0 %

Car-production Italy allocated to EU (in units)375.890

69,4 %

Italy: Additional BEV due to EU tightening in %11,8 %

11,8 %

Additional BEV due to tightening allocated to EU(in units)44.543

11,8 %

Share additional BEV in car-production Italy

8,2 %

8,2 %

Effects
in ItalyFig. 15: Employment-Effects Italy
According to the present model, the planned stricter CO2 requirements will result in a substi2019

Employment Car Industry Italy

176.303

tution of 44,543 internal combustion engine cars with fully electric ones. This corresponds tothe net loss of 3,347 jobs in Italy.
As in section 4.2 (Germany) and 4.3. (France) the calculation in Fig. 15 does not take into account that further cell production activities are required. Further green electricity is requisite

Share added value powertrain

35 %for cell production, additional charging stations and wall boxes have to be built and maintained. We expect electric cars will generate additional sales, with a positive impact on jobs in

35 % of employees allocated to powertrain

61.706wind and solar power generation. In summary, we do not predict a negative workplace effectin the Italian auto industry. Drawing from a previous Cambridge Econometrics analysis and6,1 % less employees due to fewer ICE 2030 by stronger CO2

5.071

other studies, we expect positive employment effects in the construction, electricity, hydrogen, services and many manufacturing sectors due to the transformation of the car industry.

Share of replaced manpower from total employment

2,9 %Conclusion: A negative effect on the employment in Italian car industry due to stricter EU
Net-Reduction Jobs 66% (without battery-cell-production)

3.347

requirements is not predicted. The opposite is the case, as section 3.1 has shown for the preceding analyses, an increase in employment can be expected.

Net-Reduction Jobs 66% share on total
30

1,9 %
31

4.5. Employment-Effects in Spain

Effects
in Spain

Following the same pattern as the three above countries, Fig. 15 and Fig. 16 show the model results for Spain. A production switch of 206,705 cars is calculated for Spain, which corresponds
to a net loss of 3,454 jobs.
Fig. 16: Production-Effects for Spain

20192019 Share

Car-production Spain (in units)2.248.019

100,0 %

Car-production Spain allocated to EU (in units)1.744.362

77,6 %

Spain: Additional BEV due to EU tightening in %11,8 %

11,8 %

Additional BEV due to tightening allocated to EU(in units)

206.705

11,8 %

Share additional BEV in car-production Spain

9,2 %

9,2 %

Fig. 17: Employment-Effects Spain

2019

Employment Car Industry Spain

162.634

Share added value powertrain

35 %35% of employees allocated to powertrain

56.922

6,1% less employees due to fewer ICE 2030 by stronger CO2

5.234

Share of replaced manpower from total employment

3,2 %Net-Reduction Jobs 66 % (without battery-cell-production)

3.454

Net-Reduction Jobs 66 % share on total

2,1 %@ Volkswagen AG

33

Fig. 19: Employment-Effects Slovakia
This calculation (Fig. 17) does not take into account that further cell production is required,that green electricity is necessary for cell production, that additional charging stations and2019

wall boxes are also needed. We expect electric cars will generate additional sales, with apositive impact on jobs in wind and solar power generation. In summary, we do not predict a
negative workplace effect in the Spanish auto industry. Within that context, a previous Cam-

Employment Car Industry Slovakia

81.273

Share added value powertrain

35 %35 % of employees allocated to powertrain

28.446

6,1 % less employees due to fewer ICE 2030 by stronger CO2

2.023

Share of replaced manpower from total employment

2,5 %Net-Reduction Jobs 66 % (without battery-cell-production)

1.335

Net-Reduction Jobs 66 % share on total

1,6 %bridge Econometrics study showed considerable positive employment effects in the construction, electricity, hydrogen, services and many manufacturing sectors due to the transformation of the car industry.
Conclusion: A negative effect on the employment in Spanish car industry due to stricter EU
requirements is not predicted. Rather the opposite is the case, as section 3.1 has shown in thepreceding analyses, an increase in employment can be expected.

4.6. Employment-Effects in Slovakia
With a car production of 1,069,442 vehicles in 2019, Slovakia was the fifth largest car production country in EU 27. In our model, the effects shown in Fig. 18 and Fig. 19 result for Slovakia.
The model shows that 76,063 of the 1,069,442 manufactured passenger cars must be produ-

As in the case of Germany, France, Italy and Spain, the calculation in Fig. 19 does not take intoced on a fully electric basis due to the planned stricter CO2 regulation. This would mean that

account that further cell production is necessary, that green electricity is necessary for cell

1,335 jobs would be lost in the present model.

production or that additional charging stations and wall boxes are needed. We also expectthat electric cars will generate additional sales, with a positive impact on jobs in wind andsolar power generation. In summary, a negative workplace effect in the Slovakian auto indus-

Fig. 18: Production-Effects for Slovakia

try is almost impossible to measure. Drawing from a previous Cambridge Econometrics analysis and other studies, we expect positive employment effects in the construction, electricity,

Car-production Slovakia (in units)

20192019 Share

1.069.442

100,0 %hydrogen, services and many manufacturing sectors due to the transformation of the car
industry.
Conclusion: A negative effect on the employment in Slovakian car industry due to stricter EU
requirements is not predicted. Rather, the opposite is the case, as section 3.1 has shown for

Car-production Slovakia allocated to EU (in units)641.886

60,0 %

Slovakia: Additional BEV due to EU tightening in %11,8 %

11,8 %

Additional BEV due to tightening allocated to EU(in units)

76.063

11,8 %

Share additional BEV in car-production Slovakia

7,1 %

7,1 %

34

earlier specifications, an increase in employment can be expected.

35

5. Conclusion

Dawn of European Gigafactories: Announced Lithium Ion Battery Cell Production Sites

This model-based analysis shows that even in a static one-sector model, insignificant net
effects on employment in five important vehicle production countries in the EU can be expected as a result of a stronger CO2-regulation as intended by the EU commission.
According to our model less than 28,000 direct jobs in the automotive sector of the fivecountries Germany, France, Italy, Spain and Slovakia are at risk as Fig. 20 shows. This corresponds to a risk to 1.9% of the employees in the automotive sector. The need for additional
Fig. 20: Employment-Effects without other Sectors
30.0002,1 %25.000

2,1 %

2,5 %

2,0 %

1,8 %
1,9 %

20.00015.00027.864

1,9 %
1,5 %

1,6 %

14.852

1,0 %10.000
4.876

5.000

3.347

3.454

0,5 %
1.335
0,0 %

0

Germany

France

Italy
Minus in Jobs

Spain

SlovakiaGroup of 5

Reduction in Sharebattery cell factories for 90 GWh (see Fig. 9) lithium-ion production capacity due to stricter
CO2 requirements (as noted in Section 4.1.) is associated with an additional requirement of
25,000 jobs.

regulation all these innovations couldn´t be sold in the market. What occurred in 2008 to 2015
can be repeated by fast transformation of the European car industry.

It must be noted that this is the worst-case scenario, assuming that we will not have positiveeffects in other sectors as well as neglecting competitive advantages, the automotive industry can be expected by a fast transition into green technology.

Of great importance is the new battery-cell industry in Europe. Fig. 21 provides a map whichshows the currently know plans for battery production in Europe. Further, in March 2021 Seatannounced at a ceremony with Spain´s King to support plan for a battery cell production sitein Martorell. Stimulated by the strengthened EU CO2 requirements, international chemical
and cell production groups have invested or are planning to invest in the EU on a large scale.
According to Fig. 21 there are plans for 350 GWh cell production capacity.

Other studies, like the study completed by Cambridge Economics, point to considerable positive employment effects in the construction, electricity, hydrogen, services and most othermanufacturing sectors if the car industry gets behind electric vehicles. Thus, overall, we will
have strong positive employment effects by transitioning car production to electric vehicles.

The tightening of the CO2 standards leads to the faster and larger construction of the battery production in Europe with the chance that additional vehicle production will come backto Europe, as economies of scale come into effect. According to current estimates, there willaround 50,000 new jobs in 2030 that will be created by switching to electromobility.

Furthermore, we have strong evidence from the strengthening of the EU-CO2-regulation in
the period 2008 to 2015. During this time, important innovations became marketable. Fuelsaving innovations helped the industry to become more competitive and to increase employment. Figure 3 provides an insight into the green innovations which went into the mass-production, including lightweight construction, 3-cylinder engines, Start-Stop-Systems, Mild Hybrids, downsizing of internal combustion engines and shift point displays. At that time, without

Today carmakers including General Motors, Ford, VW, Audi, Porsche, and Mercedes havealready announced that they will focus on electric vehicles as fast as possible. Mary Barry,
CEO of GM, announced early this year that GM will stop producing combustion engine cars
by 2035, Volvo by 2030 and Jaguar-Landrover from as early as 2025. Strong regulation will
support these bold decisions and will help us to establish a competitive future car industry inEurope.

3637

References
ACEA, Div. reports, Pocket-Book 2020-2021, www.acea.beCambridge Econometrics, Fuelling Europe’s Future, 2018
CAR, div. studies and reports
EU-Commission, EU regulation 2019/631,
Nature Energy, High-energy long-cycling all-solid-state lithium metal batteries enabled bysilver–carbon composite anodes | Nature Energy
Nikkei Asia Toyota‘s game-changing solid-state battery en route for 2021 debut - Nikkei Asia
VDA 2020, div. Reports, www.vda.de
WELT am Sonntag, 29.9.2019, Elektromobilität kostet bis 20230 125.000 Jobs

Impressum
Center Automotive Research
C/O D+S Automotive GmbH
Bismarckstr. 142 (Tectrum-Tower)
47057 Duisburg
Prof. Dr. Ferdinand Dudenhöffer
E-Mail: ferdi.dudenhoeffer@car-future.com
We would like to thank the European Climate Foundation for financial support, which allowed us to implement the study in the present
design, in two language versions (German/English) and by purchasingdata for the countries France, Italy, Spain, Slovakia.
38@ Ryunosuke@ Volkswagen
KikunoAG