Friday, July 1

Electrification threatens half a million automotive supplier jobs

  • The consulting firm PwC estimates 501,000 jobs at risk from the end of internal combustion engines in Europe, 70% of which would be lost between 2030 and 2035.

  • In Spain, according to data from Sernauto, there are 72,000 people working in positions directly related to combustion engines.

The end of internal combustion engines in European markets could mean the loss, for the year 2035, from around 501,000 jobs in the automotive supplier sector. This is confirmed by the European Association of Automotive Suppliers (Clepa) according to the conclusions of a report commissioned from the consultancy PwC.

According to the document, 70% of the total, about 359,000 jobs, will be lost during the five-year period between 2030 and 2035, a close date that limits the room for maneuver to manage the economic and especially social consequences that the loss of so many jobs would have.

According to PwC, job creation in an electrified future depends on the production of batteries in the European Union and the creation of a supply chain related to this component that is currently almost non-existent, and whose future is unknown. The report recognizes the countries of Western Europe as the best placed to create this favorable ecosystem and those of Central and Eastern Europe the worst placed, still depending on the combustion engine. According to his data, the 70% of value creation related to electric cars, some 70,000 million euros, are linked to the processing of materials for batteries and their assembly.

Look for alternatives

Toyota went ahead by announcing a partnership with Subaru, Mitsubishi, Kawasaki and Yamaha to seek solutions to save combustion engines, either through new fuels such as hydrogen or biofuels that greatly reduce emissions and serve as an alternative and complement to electrification. The study of PwC Rows in this same direction, concluding that the most appropriate for employment is a mixed proposal between electric cars and new fuels that allows compliance with European regulations while maintaining employment and creating added value.

However, in the current scenario, the net loss of employment would be 275,000 workplaces, since the study contemplates the creation of 226,000 new jobs for the production of batteries and electric motors. These figures would represent a reduction in the 43% in the supplier sector from now until 2040.

The situation in Spain

According Jose Portilla, general director of the Spanish Association of Automotive Suppliers (Sernauto), on Spain the automotive supplier sector employs 225,000 people directly, 72.000 of which related to the internal combustion engine propulsion system, with which these jobs are in check.

Related news

In parallel, as a study by KPMG Spain, electrification could generate between 860,000 and 1,460,000 new jobs for the automotive sector. However, they would be jobs related to new technological profiles outside the supplier sector. The consultancy aimed at specialized profiles with the decarbonization of the business, digitization and software.

However, all the studies conclude that, for the most optimistic forecasts to be confirmed, it is vital that the sector bet on battery production and invest in adapting and attracting new contracts for electric vehicles for Spanish factories. Currently, depending on the source consulted, Europe produces between 3% and 5% of automotive batteries manufactured in the world. Asia the 85%, with an important domain of China, which accounts for the majority of Asian production. For now Spain it does not have a battery-producing plant.

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