DANIEL BORRMANN

CAROLINA SACHS

FLORIAN HERRMANN

Florian Herrmann obtained his master’s degree in Industrial Engineering from the Karlsruhe Institute of Technology (KIT) and his doctoral degree in Technology Management from the University of Stuttgart. From 2011 to 2015, he worked as a research associate in the area of Mobility Innovation at the Fraunhofer Institute for Industrial Engineering IAO in Stuttgart, Germany. In 2015, he became Head of the Competence Centre Mobility Innovation, and since April 2018, he has been Head of the Research Unit Mobility and Innovation Systems at the same institution. The focus of his research work has been the analysis of value creation structures and their evolution in the automotive industry.

 

The automotive industry is set to undergo an unprecedented transformation. Nowadays, value creation is related to more than merely vehicles. It encompasses countless services around mobility, for which the ongoing digitalisation of products and processes has been decisive. Society’s expectations of transport have evolved too: it should be seamless and sustainable. In order to meet such demands, automotive manufacturers and suppliers will face technological, economic and social challenges.

Source: ©ewg3D - istockphoto.com

Efforts towards the decarbonisation of the mobility sector, i.e. compliance with CO2 emission legislation [1], have resulted in the electrification of vehicle drivetrains, among other developments [2]. Moreover, stagnating demand in Europe for automobiles, due to market saturation, continuous globalisation and the relocation of production facilities into emerging markets such as India and China, threatens to affect European car production.

'Continuous globalisation and the relocation of production facilities into emerging markets such as India and China, threatens to affect European car production'

The consequences of this evolution concern the entire automotive value chain. First, the distribution of market share associated with the various powertrain technologies is shifting: the volume of components and powertrains produced for vehicles with internal combustion engines (ICEs) is declining, while production volumes for vehicles that use electric motors and traction batteries (hybrid and battery electric vehicles; HEVs and BEVs) are increasing. Furthermore, Germany suffers additional pressure due to competition from low-wage countries.

The ELAB 2.0 project [3] mainly aims at a scenariobased, quantitative evaluation of the effects of vehicle electrification on employment. The analysis ranges from the production of important powertrain components by Tier 1 and Tier 2 suppliers [4], through the assembly of complete powertrain systems and up to their final assembly in the vehicle at the automotive manufacturers’ (OEMs) premises. A qualitative estimation of the effects on other stakeholders has also been carried out. The results achieved with ELAB 2.0’s forecasting model are used to provide recommendations to deal with these effects at strategic level.

Each phase of the automobile’s lifecycle will, in one way or another, be influenced by the electrification of powertrains. Phase-specific repercussions on personnel requirements, especially quantitatively speaking, follow particular patterns and are driven by different factors. Hence the decision to limit the project’s scope to the production of powertrains for passenger cars.

'The results obtained during the course of ELAB 2.0 have shown that the effects of powertrain electrification on employment will indeed be significant'

ELAB 2.0 distinguishes itself from other research projects by following a bottom-up approach. Numerical data regarding the personnel requirements for the manufacturing of single powertrain components, e.g. pistons and piston rods, are aggregated in order to calculate personnel requirements for complete systems, such as the electric motor and traction battery. These, in turn, can be allocated to different representative powertrains. A set of assumptions applied throughout the entire ELAB forecasting model simplifies the data collection process and ensures accuracy and comparability among all data (see Table 1). The selected components and production processes mainly encompass the share of value creation that, in general terms, is representative of the OEMs, Tier 1 and Tier 2 suppliers. Due to compliance rules, the evaluation carried out with the ELAB model purposely does not differentiate between the workforces required by each project partner, but rather aggregates the data provided and handles them anonymously.

'Political decision makers are called upon to develop strategies to drive innovation and support stakeholders along and around the automotive value chain on their transition process towards sustainable mobility'

Source: ©Heiko119 - istockphoto.com

The results obtained during the course of ELAB 2.0 have shown that the effects of powertrain electrification on employment will indeed be significant. Even in a scenario that assumes a production mix with a rather moderate share of PHEVs and BEVs in 2030 (Scenario 1), a reduction in personnel requirements can be expected. An extreme scenario that assumes an almost maximum penetration of electric vehicles (Scenario 3), and considers the effects of productivity rates in its calculations, concludes that by 2030, electric mobility could have a direct or indirect impact on every second job related to drive technologies. Additional factors, such as higher productivity rates, a more acute market stagnation over time or the relocation of value-chain processes outside Europe could even aggravate this situation. Regions where industry has so far profited from focusing on a single technology, mostly one related to ICEs, could face particular difficulties in securing employment and the region’s economic attractiveness. However, the timely implementation of a forwardlooking strategy can lead to a socially, environmentally and economically successful structural change. Political decision makers are called upon to develop strategies to drive innovation and support stakeholders along and around the automotive value chain on their transition process towards sustainable mobility.