The Luxembourg Automotive Suppliers Industry (Industrie Luxembourgeoise des Equipementiers de l'Automobile - ILEA) has estimated that a 100% electric mobility (eMobility) approach would have a limited impact on the employment across the equipment manufacturers sector in Luxembourg.
ILEA is a member of the European Association of Automotive Suppliers (CLEPA), which hired consulting firm Stratery& to assess the impact of European Green Deal on employment and added value among automotive suppliers across Europe between 2020 and 2040.
The study found that 501,000 jobs in combustion engine or engine component manufacturers are expected to become obsolete if the technology is phased out by 2035, of which 359,000 (70%) would be lost in just 5 years, from 2030 to 2035.
The automotive manufacturing sector accounts for over 5% of manufacturing employment in thirteen EU member states, with automotive suppliers accounting for over 60% of these jobs.
ILEA clarified that only a small portion of Luxembourg companies produce components for combustion engine vehicles but either they have a well-diversified product portfolio or they are in the process of developing new products. The majority of automotive equipment manufacturing companies in Luxembourg produce tyres, windshields, carpets, textiles, sensors, etc., which would not be directly impacted.
The Stratery& report found that Western European countries are better placed for the production of motors and transmission systems for electric vehicles, while employment in Central and Eastern European countries will remain heavily dependent on combustion engines.
Additionally, up to €70 billion of electric propulsion value creation will be linked to the processing of battery materials, the production of battery cells and modules, and in the assembly of battery systems. As these new technologies will require skills and expertise that are significantly different from those of conventional engine technology, most combustion engine-focused small and medium-sized businesses would miss on to the new job and business opportunities. Moreover, battery production-related activities will be more accessible to employees with a university education and fewer for mechanical workers currently producing combustion engine parts.
The study underscores the essential role of electrification in achieving the objectives of the Paris Agreement but warns at risks associated with employment in the internal combustion engine trades.