Daily Management Review

Electric Car Focus Risks Handing Jobs To China, EU Auto Suppliers Warn


 At the Frankfurt motor show, Europe’s car parts manufacturers warned that there are risks that Europe’s auto supplies industry would be damaged and jobs would be handed over to China due to a fixation on electric cars.
The need to look at other ways of cutting vehicle emissions too, such as more efficient combustion engines and synthetic fuels, by carmakers and politicians was stressed by European suppliers, which say they provide around 5 million European jobs.
China, along with South Korea and Japan dominate battery production for electric cars, and a headlong rush to electric cars would hand business to them, warned Roberto Vavassori, president of European Association of Automotive Suppliers (CLEPA).
“We need to provide a sensible transition period that doesn’t give unwanted gifts to our Chinese friends,” he said, estimating European automakers were paying 4,000-7,000 euros ($5,000-8,000) to China for batteries for every electric car produced in Europe.
Many European carmakers are investing heavily in electric vehicles, following big improvements in battery technology and Volkswagen’s diesel emissions scandal.
With Britain and France both recently announcing plans to eventually phase out combustion engines to try to cut pollution, they are being encouraged by several governments.
To accelerate their shift to electric cars, plans on the eve of the Frankfurt show were announced by Daimler and Volkswagen (VW). Albeit over a lengthy period and dependent on uptake of electric cars, the EU car industry lobby offered to further cut CO2 emissions on Wednesday.
 However, huge disruptions for both themselves and the supply chain were also pointed out by the manufacturers.
While VW said it would tender for partners to provide battery cells and related technology worth more than 50 billion euros, Daimler, for example, said it was seeking billions in savings to help fund the transition.
Many EU suppliers want the car industry to keep its options open - even those also embracing electric vehicles with European investment in battery technology lagging far behind China.
“The problem is the one-dimensional nature of the debate,” said Volkmar Denner, chief executive of Germany’s Robert Bosch GmbH, the world’s biggest auto supplier.
Opportunities in synthetic fuels, which would have the advantage of being able to use existing filling stations and engines, were being explored and optimization of the combustion engine was also being done by Bosch, he said.
“This is a faster way of limiting global warming,” he said. “We are doing this alongside electric vehicles.”
With about 5.7 percent of the total jobs or around 12.6 million in the European Union, being provided by the auto industry alone, the stakes are high.
Much less enthusiastic sounding about ditching the combustion engine was Germany, home to some of the biggest industry players. She is “no friend of bans” and the car industry will need support in its transformation, said Chancellor Angela Merkel, campaigning ahead of Sept. 24 elections.
And pressing harder for protection of jobs - from suppliers to manufacturers, are the trade unions.
“Self-contained value chains are a central pillar of our industrial model and play a big role in the success of the German economy,” Joerg Hofmann, president of the IG Metall union, told steel and car industry members.

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