# IMMC.EESC-2021-02611-AC.ENG.xhtml.EESC-2021-02611-00-01-AC-TRA-EN.docx

| OPINION |
| --- |
| European Economic and Social Committee |
| Automotive eco-systems |
| _____________ |
| The EU mobility strategy and EU industrial value chains: automotive eco-systems approach

  (own-initiative opinion) |
| |
| CCMI/181 |
| |
| Rapporteur: Arnaud SCHWARTZ


  Co-rapporteur: Monika SITÁROVÁ |

OPINION

European Economic and Social Committee

Automotive eco-systems

_____________

The EU mobility strategy and EU industrial value chains: automotive eco-systems approach

  (own-initiative opinion)

CCMI/181

Rapporteur: Arnaud SCHWARTZ

Co-rapporteur: Monika SITÁROVÁ

EN

Plenary Assembly decision

| Plenary Assembly decision | 25/03/2021 |
| --- | --- |
| Legal basis | Rule 32(2) of the Rules of Procedure |
| | Own-initiative opinion |
| | |
| Section responsible | Consultative Commission on Industrial Change (CCMI) |
| Adopted in section | 29/09/2021 |
| Adopted at plenary | 20/10/2021 |
| Plenary session No | 564 |
| Outcome of vote
  (for/against/abstentions) | 235/1/5 |

Plenary Assembly decision

25/03/2021

25/03/2021

Legal basis

Legal basis

Rule 32(2) of the Rules of Procedure

Rule 32(2) of the Rules of Procedure

Own-initiative opinion

Own-initiative opinion

Section responsible

Section responsible

Consultative Commission on Industrial Change (CCMI)

Consultative Commission on Industrial Change (CCMI)

Adopted in section

Adopted in section

29/09/2021

29/09/2021

Adopted at plenary

Adopted at plenary

20/10/2021

20/10/2021

Plenary session No

Plenary session No

564

564

Outcome of vote
  (for/against/abstentions)

Outcome of vote
  (for/against/abstentions)

235/1/5

235/1/5

1.Conclusions and recommendations

1.

Conclusions and recommendations

1.1The EESC believes that the European automotive ecosystem can become a frontrunner in developing and deploying sustainable mobility solutions. Therefore, the automotive ecosystem must actively develop strategies to shape the ongoing disruption and megatrends in Europe's automotive landscape.

1.1

The EESC believes that the European automotive ecosystem can become a frontrunner in developing and deploying sustainable mobility solutions. Therefore, the automotive ecosystem must actively develop strategies to shape the ongoing disruption and megatrends in Europe's automotive landscape.

1.2In order to reduce transport emissions by 90% by 2050, the EESC wants the EU to strive to make all transport modes sustainable, while making sustainable alternatives widely available and accessible to EU citizens. This objective can be achieved with a smart combination of powertrains that strikes a balance between environmental protection, efficient use of renewables, economic viability, and consumer acceptance, while respecting the principle of technology neutrality.

1.2

In order to reduce transport emissions by 90% by 2050, the EESC wants the EU to strive to make all transport modes sustainable, while making sustainable alternatives widely available and accessible to EU citizens. This objective can be achieved with a smart combination of powertrains that strikes a balance between environmental protection, efficient use of renewables, economic viability, and consumer acceptance, while respecting the principle of technology neutrality.

1.3The EESC strongly underlines that individual mobility must remain accessible and affordable for all, especially for commuters without access to quality public transport or other mobility solutions. A societal polarisation between those that can afford to buy a green car and those that cannot must be avoided at all costs. In this respect, the EESC warns that setting up an adjacent ETS system for the transport sector could undermine public support for the de-fossilisation of road transport if lower income groups and those that depend on road transport for their livelihood are not properly compensated.

1.3

The EESC strongly underlines that individual mobility must remain accessible and affordable for all, especially for commuters without access to quality public transport or other mobility solutions. A societal polarisation between those that can afford to buy a green car and those that cannot must be avoided at all costs. In this respect, the EESC warns that setting up an adjacent ETS system for the transport sector could undermine public support for the de-fossilisation of road transport if lower income groups and those that depend on road transport for their livelihood are not properly compensated.

1.4The EESC points out that the European automotive industry has always been a global leader and a driver for growth and jobs. In the transition to the paradigm of a digitalised and decarbonised road transport system, it should retain this position and develop the transformation pathways that allow it to deal with the disruptive trends the industry is currently facing. It should do so by building on its strengths in technology, its skilled workforce, world-class engineering, demanding consumers, sophisticated supply chains, strong SME culture, and constructive labour relations.

1.4

The EESC points out that the European automotive industry has always been a global leader and a driver for growth and jobs. In the transition to the paradigm of a digitalised and decarbonised road transport system, it should retain this position and develop the transformation pathways that allow it to deal with the disruptive trends the industry is currently facing. It should do so by building on its strengths in technology, its skilled workforce, world-class engineering, demanding consumers, sophisticated supply chains, strong SME culture, and constructive labour relations.

1.5The successful launch of the IPCEI on batteries has proved that pooling public and private resources clearly contributes to strengthening the automotive supply chain. The EESC is therefore convinced that more IPCEIs in this sector have to be considered, e.g. on hydrogen (in preparation), automated and connected cars, the circular economy, raw materials, etc. Bold action is required to deal with the supply bottlenecks in semiconductors, and setting up a second IPCEI for semiconductors would help tackle this issue.

1.5

The successful launch of the IPCEI on batteries has proved that pooling public and private resources clearly contributes to strengthening the automotive supply chain. The EESC is therefore convinced that more IPCEIs in this sector have to be considered, e.g. on hydrogen (in preparation), automated and connected cars, the circular economy, raw materials, etc. Bold action is required to deal with the supply bottlenecks in semiconductors, and setting up a second IPCEI for semiconductors would help tackle this issue.

1.6The EESC wants the EU to support a global level playing field. Europe must have the ambition to maintain its strong export position in the automotive industry. Actions must therefore be taken to:

1.6

The EESC wants the EU to support a global level playing field. Europe must have the ambition to maintain its strong export position in the automotive industry. Actions must therefore be taken to:

ostrive for reciprocity in trade relations (market access, public procurement, investments, respect of IPRs, subsidies);

o

strive for reciprocity in trade relations (market access, public procurement, investments, respect of IPRs, subsidies);

oconclude bilateral free trade agreements (including a chapter on automotive/road transport);

o

conclude bilateral free trade agreements (including a chapter on automotive/road transport);

ofight against unfair trading practices (subsidies, bilateral free trade agreements, differences in the price of carbon, social and environmental dumping);

opromote international cooperation on clean cars and low-carbon fuel technologies.

1.7The transformation of the automotive industry will have a dramatic impact on the quantity and quality of jobs needed. Active labour market policies are thus required to maintain the employability of the workforce through up- and re-skilling initiatives, for example, (like the Automotive Skills Alliance) in order to equip workers with the skills of the future. For employees that have to leave the sector, a smooth transition to another job must be guaranteed (in addition to early retirement schemes).

1.8The EESC calls for a clear mapping of the impact of the sector's digital and green transition in order to identify the regions and parts of the supply chain that are most at risk. Also, the changing footprint of the industry due to decarbonisation and digitalisation needs to be monitored taking all relevant life cycle stages into account. As the challenges the automotive supply chain has to deal with are massive, the EESC considers it imperative to set up a just transition mechanism for the sector in order to put in place the necessary flanking measures to avoid social disruption and to ensure a socially responsible transition.

2.General comments

Current situation

2.1The automotive industry has always been a cornerstone of European Union's industry and has important linkages with upstream industries such as steel, chemicals, and textiles, as well as downstream industries such as ICT, repairs, fuels, lubricants and mobility services. The sector represents over 8% of EU GDP, accounts for 28% of total EU R&D spending and its exports generate a large trade surplus. However, the future of Europe's automotive industry will depend on how it is able to make the fundamental adjustments needed to address the unprecedented challenges it is facing today.

2.2The European car industry is at the crossroads of a radical new paradigm resulting from the complex transition towards a digital and green economy. On 28 November 2018, the Commission adopted a long-term vision for a climate-neutral economy by 2050. The transport sector was identified as playing an important role in this transition. The European Green Deal of December 2019 sets a strategic framework for achieving climate neutrality. It calls for a 90% reduction in transport emissions by 2050. In this context, the EU has decided to revise its 2030 greenhouse gas emission reduction target to at least -55%. To reach this objective, the Commission unveiled its "Fit for 55" package on 14 July 2021, which revises the Effort Sharing Regulation, the Directive on the Deployment of Alternative Fuels Infrastructure and the Regulation on Setting CO2 Emission Performance Standards.

2.3The shift from fossil fuels to low-carbon power as well as the shift from creating added value in mass production of cars towards delivering mobility services, will create deep turmoil for the industry, for the many SMEs in its complex supply chains, and for the 13.8 million workers in the sector. Therefore, the challenge will be to manage this transition towards net-zero in a socially acceptable way.

Disruptive megatrends

2.4Globalisation. As sales on mature markets slow, automotive sales are growing in emerging markets. As a result, the economic centre of gravity is moving from the EU and the US to Asia. China is currently churning out 26 million cars per year as against 22 million in the EU. China has also been among the first to start producing electric vehicles and has a mature battery industry. Japan and Korea also have a lead on batteries and are especially strong in semiconductors. Europe also has problematic access to ethically sourced raw materials such as lithium and cobalt
  1
  . Additionally, the automotive sector has to take into account mounting geopolitical tensions.

2.5The challenge of sustainable development. According to the vision set out in the EU's Sustainable and Smart Mobility Strategy, "by 2030, there will be at least 30 million zero-emission cars" on European roads. On 14 July, the EU Commission proposed that only zero-emission vehicles will be allowed to be marketed from 2035. This will require a steep increase in the share of zero-emission vehicles in the vehicle fleet (from 0.2% currently to 11-14% in 2030)
  2
  . Delivering on the objectives of the Green Deal will create first-mover advantages, and support Europe's leadership in low-carbon technologies and its global competitiveness. This also means massive investments in the development of alternative drivetrains (battery-electric, hybrid, hydrogen) and defossilised fuels for conventional drivetrains that will still be present in the fleet for a long time. The pace of uptake of these powertrains and fuels depends on the enabling regulatory framework and the payback periods for these investments. The EU's Sustainable and Smart Mobility Strategy recognises the need "to make all modes of transport more sustainable". This approach requires the uptake of low and zero emission vehicles as well as renewable and low-carbon fuels for road, waterborne and air transport.

2.6Changing consumer mindsets. Mobility behaviour is changing. A new generation of consumers is less interested in owning a car as many live in urban areas with well-established collective transport systems. Instead of owning a car, they will look for another mobility solution (car-sharing, ride-hailing, micro-mobility). Other trends that were already visible have been reinforced by the pandemic, such as online shopping, remote working, videoconferencing, delivery services. They will result in a reduction in personal car mobility, while the use of commercial vans will increase.

2.7Increasing connectivity. Digital technologies aim to allow cars to become almost permanently connected. This could create considerable potential for new data-driven business models. Smart cars would be equipped with active safety features, infotainment, traffic information services, vehicle-to-infrastructure communication, etc.

2.8The gradual automation of the car. The journey to self-driving cars will lead to ever increasing levels of autonomous vehicle features. Automated driving would require enormous investments in software, communication networks, and hardware (radars, lidars, transponders). It also creates many challenges regarding reliability, the legal framework, price, road equipment, and liabilities.

2.9Digitalisation of production. The automotive industry invented the assembly line (Ford), the principles of lean manufacturing (Toyota), and globalised production platforms (VW). Currently it is embracing the principles of Industry 4.0 with advanced robotisation, digitally integrated supply chains, advanced manufacturing systems, and additive manufacturing.

Consequences of the green and digital transformation

2.10A smaller, digitalised and decarbonised automotive industry will create an enormous job challenge. BEVs have fewer components and are simpler to produce, while at least 36% of their added value is in batteries. Based on an extrapolation from a recent study by the German IFO Institute, 620 000 jobs will be at risk in the EU value chain of conventional powertrains . Solutions can be partly found in (early) retirement
  3
  , for example, or more broadly in revolutionising the future of work
  4
  . On the other hand, the transition will also generate new jobs in adjacent industries as power electronics, smart grids, road and charging infrastructure, batteries, new materials, and alternative fuel powertrains.

2.11A trend for consolidation, strategic alliances (e.g. Stellantis, alliances between BMW and Mercedes and between VW and Ford) in order to pool R&D in new powertrains, combine the purchasing of components. These mergers and alliances will always result in new company strategies, revisiting of the industrial footprint, outsourcing to regions with lower labour costs, job reduction schemes and increased pressure on suppliers. Furthermore, spinning off mature businesses allows companies to concentrate resources on the new powertrains.

2.12Blurring boundaries between the automotive industry and the IT sector. Information technologies will penetrate at all stages of the supply chain. Data will become a new raw material and a source of revenue. A global industry reshuffle is underway with new players making inroads in the industry: mobility providers (Uber), IT giants (Google, Apple, Baidu), chip producers (Intel, NXP, STM), battery producers (Panasonic, CATL, LG), emerging OEMs (Tesla).

2.13Added value could shift away from the core of the automotive industry (OEMs) to other parts of the supply chain as the share of information technologies as a percentage of added value will only increase to the detriment of mechanical components.

2.14It is likely that more and more added value will be created in mobility services such as ride-hailing, ridesharing, car-sharing and plenty of digital services like navigation apps, infotainment, advertising, and advanced driver assistance systems. This will create new business models: while OEMs see the car industry as a market of 100 million vehicles, digital platforms are looking at it as a market where 10 trillion miles can be sold every year.

2.15The job structure of the sector will be completely overhauled. New skills and experience will be needed (electronics, electrochemistry, new materials, information technologies), while in parallel there will be a fall in demand for traditional mechanical skills. Equipping the workforce with these skills will be an important challenge for the automotive industry.

2.16All the above-mentioned megatrends will reinforce each other. While there is widespread consensus that game-changing disruption has started, making the social transition towards decarbonised transport more gradual by organising a just transition must become a priority for all stakeholders. Sustainable mobility must be affordable for all to be accepted.

3.Mastering the transformation

Environment: shifting gears towards sustainability

3.1To reduce transport emissions by 90% by 2050 the EU should strive to make all transport modes sustainable while making sustainable alternatives widely available and accessible to EU citizens. This objective can be achieved through a smart combination of powertrains that strikes a balance between environmental protection, efficient use of renewables, economic viability, and consumer acceptance, while respecting the principle of technology neutrality. This requires a combination of different strategies:

oReduction of tank-to-wheel CO2 emissions (48V, hybrids, electricity, hydrogen, more efficient internal combustion engines, etc).

oReduction of well-to-wheel CO2 emissions. The development of e-fuels, and biofuels that are in line with the UN SDGs and the sustainability criteria set out in the Directive on the promotion of the use of energy from renewable sources
  5
  needs support to avoid impact on land-use, biodiversity, and forests.

oA coordinated strategy for clean cities (e.g. by decarbonising last-mile transport, innovative micro-mobility solutions, intermodal travelling).

oReduction of life-cycle emissions (manufacturing and recycling).

oReduction of the emission intensity of the transport sector (intelligent transport solutions, shared mobility). For each transport need, a sustainable mobility solution must be available (long distance freight transport via biofuels and synthetic fuels/hydrogen, battery electric powertrains for urban last-mile delivery) in respect of the principle of technological neutrality.

oEncouraging retrofitting whereby the ICE is replaced with an electric engine or supplemented (hybridized) with in-wheel hub motors.

oReducing the weight of newly marketed cars
  6
  .

3.2The Commission intends to set up an adjacent ETS system for road transport and buildings. Putting a price on road transport emissions will equate to taxing fuel (but with a qualified majority). The revenues will be used to compensate those that are reliant on an internal combustion engine vehicle, either for work or due to a lack of alternative transport options. As the design of such a compensation mechanism will be extremely complex and the higher fuel prices will hurt lower income groups disproportionately, the EESC is not convinced that this is the way forward as it will undermine public support for climate action. Instead, efforts to reduce the lifecycle cost of alternative powertrains, and to reduce the cost of low and net-zero carbon fuels would seem to be a better way to bring low carbon transport within the financial reach of the many.

3.3Priority should be given to so-called "charging deserts". Today, 213 000 charging stations are available and 70% of all EU charging stations are concentrated in three countries (the Netherlands, Germany and France). With a target of 1 million public chargers by 2025 and 3 million by 2030, the gap to be bridged in terms of infrastructure development is enormous (the European Sustainable and Smart Mobility Strategy estimates that the additional investments needed in charging and refuelling infrastructure for low-carbon fuels are equivalent to EUR 130 billion per year, for the next decade). Therefore, the EESC supports the introduction of mandatory targets. As part of the Recovery and Resilience Facility, the flagship project "Recharge and Refuel" only encourages the Member States to accelerate the deployment of recharging and refuelling stations as part of their recovery plans. Special attention should be given to dwellings, the preparation of grids for increased EV integration, the interoperability of charging infrastructure, the development of smart charging services (e.g. through load balancing) and the supply of renewable and low-carbon fuels. As fully electric heavy duty vehicles (HDV) are becoming a reality, they also deserve a dedicated focus.

3.4As long as price parity between conventional and electric vehicles (foreseen for 2025-27) is not achieved, financial incentives will be needed to support the market uptake of low-carbon vehicles. These can be financial (subsidies, tax breaks and scrapping systems) or non-financial (priority lanes, toll exemptions, reserved parking spaces), including a coherent regulatory environment for the promotion of investments in low-carbon fuels. Special attention should be paid to greening car fleets as this could be an important lever to accelerate the transition, and also because this will contribute to creating a second-hand market for zero- and low-carbon vehicles.

3.5Support for the development of the circular economy in the automotive ecosystem: the recycling, re-use and re-manufacturing of cars and parts. Circular economy principles should also be applied to increase the amount of secondary raw materials available to the industry and reduce the dependence on imports. However, recent studies suggest that recycled materials will only be on an adequate market scale in a decade, when the lifespan of EVs is reached. It is therefore necessary to be realistic and understand that primary extraction is crucial at least in the 2020s. Therefore, the diversification of supply chains, as well as a green and ethical mining strategy, must guarantee the security of supply. Furthermore, the upcoming revision of the End-of-Life Vehicles Directive 2000/53/EC needs to take account of the electrification of vehicles and the need to develop markets for secondary materials.

Economy: Maintaining and developing the full automotive supply chain inside the EU

3.6Promoting industrial collaboration. The huge R&D budgets (currently EUR 60 billion per year) that are currently invested in the development of decarbonised, connected, automated and shared mobility require industrial collaboration and public-private partnerships. In this respect, the roll-out of innovation partnerships under cluster 5 (climate, energy, mobility) of Horizon Europe (clean hydrogen, batteries, connected and automated mobility, zero-emission road transport, driving urban transition) deserves full support. Furthermore, industrial alliances under the auspices of the European Commission (like for batteries, hydrogen, raw materials and the one announced for the Renewable and Low-Carbon Fuels Value Chain) provide a broad and open platform to establish strategic roadmaps and the coordination of R&D, investments and the market introduction of new innovations. Finally, pooling public and private resources in IPCEIs will clearly strengthen the European automotive supply chain, reduce strategic dependencies and foster the twin green and digital transition. New IPCEIs have to be considered: connected and automated cars, the circular economy, integration of energy systems, supply of raw materials, the data economy, semiconductors.

3.7Challenges of developing a sustainable and circular battery value chain
  7
  inside the EU Localising the manufacture of batteries and fuel cells must be a crucial EU objective. EU battery and hydrogen alliances deserve to be supported and sufficient resources must be made available to them. These industrial alliances must trigger massive investments in production facilities and provide thousands of jobs in Europe. Care will have to be taken to prevent fractures between the regions of Europe, as is currently visible.

3.8The megatrend of connected and automated cars could lead to a shift in value added from selling and servicing vehicles towards new disruptive business models based on data-enabled services and mobility as a service. The automotive ecosystem must be prepared for entering and securing its presence in these new business models. This will require technological and regulatory standards to provide new innovative mobility services such as pay per use, location-based advertising, distance updates/maintenance of vehicles. Building a European mobility data space will also be key in securing European leadership in digital mobility services. It will also be necessary to deploy the requisite digital communications infrastructure and to design roadmaps for increasing levels of automation (including a framework for large-scale testing, access to data, and a new approach to the type approval of vehicles). Furthermore, the long-term impact of increasingly automated vehicles, in particular on jobs and ethical issues, needs to be assessed as this will be important to ensure social acceptance. Finally, as freight transport may intensify in the future (e-commerce), intelligent transport mobility solutions need to be developed based on the multimodal organisation of transport, cost-efficiency (high-capacity vehicle combinations), and sustainable transport modes, using automation and connectivity solutions in the logistics chain.

3.9Smart technologies and digital solutions based on the "Industry 4.0 paradigm" must support the integration of production systems and help to make them more flexible. Enhanced production systems (not only integration of the production processes at company level) along the full supply chain will make automotive supply chains more resilient and underpin competitiveness. Digitalisation has to be supported by creating an industrial data space for the sector. However, these technologies also entail increased automation with a negative jobs impact, and that has to be addressed.

3.10Supporting a global level playing field. Europe must have the ambition to maintain its strong export position in the automotive industry. Therefore, actions must be taken to:

ostrive for reciprocity in trade relations (market access, public procurement, investments, respect of IPRs, subsidies);

oconclude bilateral free trade agreements (including a chapter on automotive/road transport);

ofight against unfair trading practices (subsidies, bilateral free trade agreements, differences in the price of carbon, social and environmental dumping);

opromote international cooperation on clean cars and low-carbon fuel technologies.

3.11Support for global technical harmonisation within the framework of the United Nations Economic Commission for Europe (UNECE) needs to be strengthened. The supply bottlenecks in automotive semiconductors need to be solved by bold action. Demand for semiconductors will continue to rise as cars are becoming electronic devices. In this respect, the EESC fully supports the proposal in the latest communication on industrial policy to develop a toolbox for reducing and preventing Europe's strategic dependencies. Also, the goal set in the European Digital Compass of doubling Europe's market share in global semiconductors from 10 to 20% needs full support. Setting up a second semiconductor IPCEI will certainly contribute to achieving this goal. The EU Member States should also deliver on their promise to spend 20% of the COVID Recovery and Resilience Facility on the digital transition. Further actions could include attracting foreign direct investment, and establishing strategic cooperation between automotive companies and semiconductor producers. Finally, the Observatory of Critical Technologies needs to closely monitor the many other strategic dependencies in the automotive industry: raw materials, hydrogen, batteries, renewable energy, cloud technologies, etc.

3.12The impact of the new automotive landscape on the aftermarket needs to be addressed. The automotive aftermarket, which employs four million people, is set to be confronted with deep structural change coming from reduced sales, electrification, reduced demand for fuels, online sales, and reduced maintenance. The sector will have to re-invent itself as a provider of mobility services: updating cars, preventive maintenance, ride-hailing, car-sharing, and developing business models in micro-mobility. Conflicting interests regarding access to in-vehicle data must be overcome and an interoperable and standardised platform set up in order to allow the aftermarket to develop data-based services (like remote diagnostics, software updating, preventive maintenance).

Society: Managing change and ensuring a socially fair transition

3.13The transformation of the automotive industry will have a dramatic impact on the quantity of jobs needed in the manufacturing of cars and their components, as well as on the job profiles needed for the new paradigm. Therefore, labour market policies should focus on maintaining/increasing the employability of the workforce by means of lifelong learning, and on creating flexible pathways between the world of education and the world of work (e.g. dual learning systems, well-functioning apprenticeship markets and certification of non-formal learning). The internal mobility of workers in companies should be promoted by up- and re-skilling in order to equip them with the skills of the future (decrease in manual work and sharp increase in digital skills with a special focus on software and electronics engineering). European sectoral initiatives such as DRIVES and ALBATTS and the new Automotive Skills Alliance are key tools in addressing the skills challenge.

3.14For employees that have to leave the sector, a smooth transition to another job should be organised . They must be offered access to the new jobs that will indeed be created in emerging industries such as IT, 5G networks, power electronics, charging infrastructure, the production of renewables, smart grids, smart roads, mobility services, batteries, alternative fuels, energy storage, electricity production and distribution. This will be very challenging as these jobs will probably be created elsewhere at another time and with other skillsets than the jobs that will disappear. Income security must be guaranteed during the transition. Mass redundancies can also be avoided by means of systems of early retirement, short-time work and working time reduction. A proper social dialogue must be ensured in order to be able to anticipate change in good time and to avoid social disruptions and conflicts.

3.15A clear mapping of the impact of the sector's digital and green transition is needed in order to identify the regions and parts of the supply chain that are most at risk. New social fractures should not appear between East and West, nor between southern and northern Europe. Also, the changing footprint of the industry because of decarbonisation and digitalisation needs to be monitored. The potential progress in the use of sustainable biomass should be looked at closely, as there are also opportunities for the creation of new jobs here, with due regard, at the same time, to the need to stay within the ecological boundaries.

3.16All stakeholders (companies, trade unions, cluster organisations, authorities, labour market agencies, regional development bodies) in automotive regions should work together intensively on comprehensive regional re-development plans.

3.17Stranded assets in the automotive supply chains must be avoided by ensuring timely and adequate support for the many SMEs that do not have the resources (human and financial) to reshape their activities and move to more promising business models.

3.18Individual mobility must remain accessible and affordable for all, especially for commuters without access to quality public transport or other mobility solutions. This can be achieved by providing compensation for the higher price of alternative powertrains, and of low and net zero-carbon fuels that can be used in a conventional car. A societal polarisation between those that can afford to buy a green car and those that cannot must be avoided at all costs.

3.19Conclusion. The European automotive industry has always been a global leader and a driver for growth and jobs. In the transition to the paradigm of a digitalised and decarbonised road transport system, it should retain this position and develop the transformation pathways that allow to deal with the disruptive trends the industry is currently facing. It should do so by building on its strengths in technology, its skilled workforce, world-class engineering, demanding consumers, sophisticated supply chains, strong SME culture, and constructive labour relations. The European automotive ecosystem must become a frontrunner in developing and deploying sustainable mobility solutions. Therefore, the automotive ecosystem must actively develop strategies to shape the ongoing disruption and megatrends in Europe's automotive landscape. As the challenges the automotive supply chain has to deal with are massive, the EESC considers it imperative to set up a just transition mechanism for the sector in order to put in place the necessary flanking measures to avoid social disruption and to ensure a socially responsible transition.

Brussels, 20 October 2021

Christa Schweng

  The president of the European Economic and Social Committee

_____________