Fraunhofer ISI

Electric mobility: Opportunities for the business location Germany

Against the background of the debate about the future of the combustion engine in Germany and the proposed ban on conventional cars in France and Britain the Fraunhofer Institute for Systems and Innovation Research ISI publishes an analysis of possible economic impacts of the change towards electric mobility. While the most recently published study of the Munich based ifo Institute for Economic Research points out the potential negative economic consequences of cars with a combustion engine the experts of Fraunhofer ISI definitely see opportunities and potential for positive impacts for jobs and value added for the business location Germany in the transition from conventional cars to electric vehicles. However, for this to happen the change must be implemented actively.

The new investigation is based on own analyses of the current and future competitive position of the German automotive industry regarding electric vehicles and the analyses of national and international studies on the issue. The interdisciplinary research team arrives at the following results:

Currently German manufacturers have comparable market shares for the sale of electric vehicles as for conventional cars. “If the market position remains constant, the transition towards electric mobility promises similarly positive effects on jobs and value-added in Germany as the production of conventional cars“, says Professor Martin Wietschel, Head of the Business Unit Energy Economy and Deputy Head of the Competence Center Energy Technology and Energy Systems at Fraunhofer ISI.

An analysis of studies which report the gain of new jobs for electric mobility minus the loss of jobs for conventional vehicles shows for Germany until 2030 a number of possible scenarios with an almost constant number or positive impacts on jobs and value-added. In addition to new jobs in the automotive industry, a number of new jobs are also envisaged in energy economy and through new services.

However, the transformation towards electric mobility is accompanied by a structural change, a shift within the automobile value-added chains and a transformation of jobs. Here it will become important to create training and retraining opportunities as well as generally new training opportunities in order to prepare future specialist workers for this change. In other areas too the transformation towards electric mobility has to be actively implemented. This includes removing existing weaknesses, for example during the production of battery cells, actively tackling the transformation of industrial structures and promoting the development of new business models. The threatening losses in the areas of production and supply of the conventional power train and effects outside of the manufacturing industry, for example in commerce and maintenance, can then be successfully compensated.

If the current good competitive situation of the German industry for electric vehicles can be successfully maintained or even expanded, the chances are good that the transformation towards electric mobility has all in all positive impacts on jobs and value-added in Germany and losses for combustion engines can be compensated. The discussion about the consequences of a ban of conventional cars with combustion engines has to also pay attention to the fact that Germany exports 60 percent of conventional cars which are produced in Germany. In addition, the market shares of hybrid electric vehicles (battery electric vehicles with combustion engine, so-called plug-in hybrid electric vehicle PHEV) have today already risen to almost 40 per cent of all electric vehicles. If these positions are maintained, a rapid exit from the sale of conventional cars in Germany will only have partially negative impacts on jobs and value-added in the industries, which rely on the combustion engine in Germany. Depending on legislation the PHEV could also be affected by a ban on vehicles with combustion engines.

As so far only few comprehensive studies on the economic effects are available, that is to say studies which take into account the impacts on employees as well as the downstream industries such as commerce or maintenance, the team at Fraunhofer  ISI sees further need to research this issue.