CLEPA President | The Transformation Continues | A Look Ahead to 2022

In many ways, this New Year will set the tone for the global economy “post-COVID”. We are seeing significant changes as we transition away from our dependency on fossil fuels, deal with the longer term economic impacts of the pandemic and adjust business practices to improve organisational resilience. We’ve also reached a turning point on EU Green Deal objectives, evidenced by the Fit for 55 package, which will this year set the course on how we get to carbon-neutrality.

in CLEPA, by Thorsten Muschal, 26-01-2022

However, this on-going and needed transformation is not without its challenges. Supply chain bottlenecks, uncertain production volumes and increasing energy costs are dominating the start of the year. Automotive suppliers in 2022 will have to navigate an uncertain economic climate while continuing to invest in, and hopefully capturing, opportunities related to the green and digital transition.

Three market trends will shape 2022

  • Doubling-down on innovation despite delayed recovery
  • Continued cost pressures and stressed supply chains
  • Moderate electric vehicle sales compared to 2021

These trends underscore that now, more than ever, our sector requires a regulatory framework that enables automotive suppliers to capitalise on strengths and that provides the flexibility to adapt to changing circumstances – be they technological breakthroughs, geopolitical events, or availability of resources.

Reinforcing innovation despite delayed sector recovery

European suppliers invested around 20 billion euros in R&D, despite vehicle sales being more than 12 million below 2019 levels due to shortages. T1-2 suppliers were responsible for more than 50% of R&D in electric mobility in 2021.

The past three years were marked by suppressed production volumes and revenues, but automotive suppliers across the EU have continued to invest in research & development and strengthened their innovative capabilities, nonetheless. Investments in e-mobility, battery supply chain, connected and autonomous driving and semiconductors have continued to increase, and the EU automotive supply chain plays a crucial role with its contribution. 2022 will be marked by the need for continued investment in the innovative arm of our sector.

Costs pressures and stressed supply chain

Energy prices, raw material and shipping costs more than doubled in 2021. Ongoing semiconductor shortage could delay global production of four million vehicles in first half of 2022, while energy prices are already resulting in aluminium mills shutting down.

2021 was marred by shortages as far ranging as magnesium, to aluminium, steel and polymers, but chips alone delayed the production of nine million vehicles globally. Supply chains are likely to remain a concern in the year ahead, even if chips shortages may become less acute in the course of the year. Elevated energy and raw material prices reinforced by an increasing carbon price are not only likely to pressure the full automotive ecosystem but may also shape the industrial strategy and Green Deal policy debates

Electric vehicle growth will moderate in 2022

Annual production of battery electric vehicles will for the first time surpass one million in the EU in 2022, reaching 1.5 million (against six million globally), but growth is projected to slow down to 42% in 2022, compared to 55% YOY.

Electrification gathered pace in 2021, with battery electric and plug-in hybrids reaching double digit market shares across the EU’s biggest markets. The uptake of EV’s across Europe and global markets will continue to grow, however, some industry experts suggest that EV growth in the EU could soon hit a temporary ceiling due to lack of charging infrastructure and range anxiety among non-urban consumers.

EU regulations require incomparable transition pace, coupled by supply chain and cost risks

2022 will be a crucial year for the EU’s Green Deal and its digital agenda, as policy makers will search for the majorities to turn last year’s proposals into law. The past couple of years have taught us how complex and fragile global supply chains are, and how important they are for the global economy and society. We would be wise to take note of the lesson, that huge transformations require flexibility. We should avoid single-solution dependencies. Electric vehicles will play a crucial role in reaching climate objectives, but both employment impact and the resilience of supply chains would benefit from a more holistic and open technology approach.

A CLEPA commissioned study, carried out by PwCStrategy&, found that an EV-only approach to the transformation would put over half a million EU jobs at risk. Further, the International Energy Agency warned earlier this year about shortages of crucial raw materials like lithium.

A mixed technology scenario allowing for both rapid electrification and sustainable renewable fuels would make the transition more manageable through the longer-term use of hybrid vehicles, and it would incentive the investments needed to scale up these clean fuels. This is particularly important for defossilising the existing car park of 300+ million vehicles.

I ask myself why is the EU putting all of their eggs in one technology basket? We have invested heavily over the years and are leaders in advanced combustion technology. We have a competitive advantage and would be doing ourselves a disservice not to leverage it in the future.

While there is broad support for EVs around the world, no major global car market (USA, China, Japan) is opting for technology bans – there is the realisation that transport needs are too diverse for just one solution. Technology openness gives industry the needed time to transition, while mitigating the social disruption often coupled with abrupt change, without compromising on climate

The digital transformation

Digitalisation is another key pillar of automotive suppliers’ strategy to deliver green, safe and smart mobility for society. The long-awaited proposal for an EU Data Act is expected late February and should facilitate the optimal use of data by regulating fair access to data. Currently, the data flow between a vehicle and the next point of communication is limited and does not allow a variety of market players and businesses to provide new services. The Data Act should improve automotive suppliers’ abilities to develop the technologies and monetise services for both the safety and sustainability of mobility. The expected proposal for an EU Chips Act could give EU industry the needed levers to improve resilience in the long term, but we should not forget that resilience requires openness for global trade and investment.

2021 brought a more prolonged recovery than hoped. The road ahead in 2022 continues to be covered in a cloud of supply chain disruptions, COVID uncertainty and high energy prices, but the fog in which we find ourselves is all the more reason to push ahead towards the certainty of climate neutrality. But this will require a full commitment to innovation, coupled with a flexible regulatory framework that facilitates investment, anticipates change, and allows for the full scale of technological progress.

Thorsten Muschal
CLEPA President and Faurecia’s Executive Vice President of Sales and Program Management

Automated driving: Bosch and Volkswagen Group subsidiary Cariad agree on extensive partnership

Engineering alliance will accelerate introduction of automated driving functions across all vehicle classes

in Bosch, 25-01-2022

  • Safe, stress-free, and natural driving experience: hands-free driving functions to be created for one of the world’s biggest vehicle fleets.
  • Expertise redoubled: more than 1.000 experts from Bosch and Cariad to collaborate in engineering work.
  • Solutions for today and tomorrow: engineering platform will serve as basis for automated driving up to Level 3.
  • Joint development targets to be explored and evaluated for Level 4.

More safety and less stress for drivers, more rapid deployment of automated driving functions across all vehicle classes: Bosch and the Volkswagen Group subsidiary Cariad are now collaborating to achieve this objective, and have agreed to form an extensive partnership. The companies want to make partially and highly automated driving suitable for volume production, and thus available to the broad mass of consumers. For the vehicles sold under the Volkswagen Group brands, the alliance aims to make functions available that will allow drivers to temporarily take their hands off the steering wheel. More specifically, these functions are Level 2 hands-free systems for urban, extra-urban, and freeway driving, as well as a system that takes over all driving functions on the freeway (SAE Level 3). The first of these functions are to be installed in 2023.

For partially and highly automated driving, the two companies will jointly develop a state-of-the-art, standardized software platform. The aim is to use this platform in all privately used vehicle classes sold under Volkswagen Group brands – and thus in one of the world’s biggest vehicle fleets. It will also be possible to integrate all the component parts developed by the alliance in other automakers’ vehicles and ecosystems

Software and volume-production expertise

“For privately owned vehicles, progress to automated driving happens one step at a time. At Bosch, we’ve been working successfully on this for many years now. Together with Cariad, we will now be accelerating the market launch of partially and highly automated driving functions across all vehicle classes, and thus making them available for everyone. This will make driving on the roads safer and more relaxed,” says the Bosch board of management member Dr. Markus Heyn. “We will be able to offer the solutions we create to our other customers as well, and in this way set new standards.” The two partners have got what it takes to make increasingly automated driving a common sight on our roads: they have decades of experience in the volume production, scalability, and approval of driving systems, as well as expertise in the areas of software, data-driven development, and artificial intelligence.

„For privately owned vehicles, progress to automated driving happens one step at a time. At Bosch, we’ve been working successfully on this for many years now. Together with Cariad, we will now be accelerating the market launch of partially and highly automated driving functions across all vehicle classes, and thus making them available for everyone. This will make driving on the roads safer and more relaxed“

Bosch board of management member Dr. Markus Heyn

“Automated driving is key to the future of our industry. With our cooperation, we’ll strengthen Germany’s reputation for innovativeness. Bosch and Cariad will further enhance their expertise in the development of pioneering technologies,” says Dirk Hilgenberg, the Cariad CEO. “This underscores our ambition to deliver the best possible solutions to our customers as soon as possible.”

„Automated driving is key to the future of our industry. With our cooperation, we’ll strengthen Germany’s reputation for innovativeness. Bosch and Cariad will further enhance their expertise in the development of pioneering technologies“

Cariad CEO Dirk Hilgenberg

Intelligently processing information from the real environment

At various locations belonging to the two companies, and especially in Stuttgart and Ingolstadt, associates from the Bosch Cross-Domain Computing Solutions division and Cariad will work together to develop partially and highly automated driving functions. Working in mixed, agile teams, they will be part of a global network. At peak times, it is expected that the various modules required by the project – from middleware to individual applications – will occupy more than 1.000 experts from the two companies. The two companies have already started recruiting fresh experts to work in the alliance as well.

The focus of the project’s work will be data-driven software development on the basis of information from 360-degree surround sensing. For this purpose, a highly innovative development environment will be created for the recording, evaluation, and processing of data. The environment will also make use of AI methods. The idea behind this is a simple one. The more extensive the pool of data from real road traffic, the more robust and natural the design of the partially and highly automated driving functions can be. This applies, for example, to additional layers for high-resolution maps for the localization and lateral and longitudinal guidance of vehicles. The alliance will also be working on these layers. Moreover, it applies equally to everyday driving situations and to what are known as “corner cases” – the seldom occurring road-traffic incidents that are especially tricky for a system to resolve.
Information processing in real time

“The best proving ground for the development of automated driving is road traffic. With the help of one of the world’s biggest connected vehicle fleets, we will gain access to a huge database. This will allow us to take automated driving systems to a new level. All our customers will be able to benefit from this,” says Dr. Mathias Pillin, president of Bosch Cross-Domain Computing Solutions. “Together, we can test automated driving functions on a broader scale in actual vehicles and implement them more quickly. Our engineering work will be done jointly, with Bosch and Cariad as one team. There has never been an alliance like this in the automotive industry,” says Dr. Ingo Stürmer, the alliance’s project director at Cariad.

This also involves feeding the data gathered in real traffic conditions into the development process – continuously and in real time. Each kilometer driven in real traffic conditions, and the data gathered, evaluated, and processed as a result, means a bigger pool of data and a better basis from which to make even higher levels of automated driving reality and get them safely and reliably onto our roads. The partners have also agreed to examine the possibility of joint development targets and timelines on the path the fully automated driving (SAE Level 4).
The guiding principle behind this partnership on equal terms is as follows: one of the world’s biggest automaking groups plus one of the world’s biggest automotive suppliers equals a huge step forward in the development of automated driving.


CLEPA | EV Transition Impact Assessment: 5 key questions answered

CLEPA and its members fully support the energy transition and the EU’s climate objectives. As key innovators, designing and manufacturing all of the systems and components needed for safe, smart and sustainable mobility, CLEPA members are in the frontlines of the mobility transformation.

in CLEPA, 20-01-2022

We fully support rapid electrification as a must to reaching climate objectives, in combination with other sustainable low and net-carbon options. Decarbonising the transport sector is absolutely essential, and this can only be achieved through a mixed technology approach, allowing Europe to transition in an effective and efficient manner, while preserving jobs, EU competitiveness, and consumer choice and affordability. A manageable and just transition is necessary for a successful Green Deal.

Given recent interpretations, we welcome the opportunity to complement the recent study commissioned by CLEPA, and carried out by PwC Strategy&, entitled ‘EV Transition Impact Assessment 2020-2040: Study on Workforce of Automotive Suppliers’, with additional educational elements and details about the methodology and conclusions, issued by CLEPA. Please see more on our position on climate-neutral transport and CO2 standards here and more Q&As on the study answered here.

1. What are the similarities and differences between this and other studies looking at the potential impact of electrification?

Earlier studies into the employment impact of electrification have either assumed a slower uptake of electrification than currently foreseen or focused on vehicle manufacturers rather than automotive suppliers. In addition, the negative job impact on automotive manufacturing has mostly been substantiated by macro-economic models that look at the wider European mobility ecosystem. Our recent study is the first of its kind in that it takes a more granular look at company, regional and supplier-specific challenges, where other studies look more widely at the mobility ecosystem as a whole. As suppliers represent more than 60% of employment related to automotive manufacturing, with one-fifth of this employment consisting of SMEs and highly specialised companies, the study provides a much-needed assessment of the impacts on the supplier industry.

As in earlier reports conducted by the Boston Consulting Group (June 2023), Fraunhofer (December 2018) and other leading institutes, CLEPA’s study results conclude that an electric only approach will have a significant social impact independently of the opportunities that may be created. The Boston Consulting Group estimated that in 2030, halfway through the transition, 274,000 jobs with internal combustion engine oriented suppliers and 166,000 jobs with vehicle manufacturers would become obsolete due to reduced labour requirements for battery electric vehicle production. The study suggests that the 237,000 jobs in battery production would likely be with other companies.

PwC Strategy& combined a macro-model with country, technology and supplier specific insight based on 199 collected surveys (mostly at plant level) and 33 expert interviews and workshops. Production levels that may be sufficient to maintain employment at the European level, may not be at a country or event company level, as a company cannot operate half a plant. Please find more on the methodology of the study here.

2. Is a mixed technology approach just a way to maintain the status quo and the internal combustion engine?

No. By 2030, 91% of light vehicle sales will be electrified powertrains and more than half of vehicles sold can be powered by electricity alone[1]. Sales of hybrid vehicles peak in 2035 while battery electric and fuel cell vehicles will continue their growth.

Our mutual objective with the EU is to reduce emissions and reach climate-neutral mobility. Technology is not the enemy, but rather fossil fuels. What is meant by mixed technology is rapid electrification, in combination with other sustainable low and net-carbon options, which would make the transformation more manageable without compromising on climate goals.

3. Is the term “zero-emission” accurate – how should the carbon footprint of a vehicle be measured?

The issue with the current tailpipe measurement (or Tank-to-Wheel) is that it only assesses emissions from the vehicle’s exhaust, ignoring emissions related to the production of vehicles or the fuels they use, including how electricity is generated. A more accurate term would therefore be zero tailpipe emissions. To incentivise technologies with the lowest overall carbon footprint, emissions from vehicles should ideally be regulated on life-cycle basis, with a Well-to-Wheel (WtW) approach as a first step, which considers the production and distribution of the fuel/electricity used to power a vehicle (Well-to-Tank). More explanation on the different phases of CO2 emissions measurements can be found here.

4. Are EVs the only way to meet Green Deal objectives, and to reduce transport related emissions?

There are more options than tailpipe-zero emissions. A technology open approach, including rapid electrification with clean and renewable energy, complemented by clean combustion technology with sustainable renewable fuels, allows us to reduce emissions both through renewable energy and net-carbon fuels. In fact, without sustainable renewable fuels, the EU will not be able to decarbonise the existing fleet of over 300 million vehicles, which is essential to reaching climate targets.

All available solutions that can help reduce transport related emissions should play a role in the path towards climate neutrality. The approach to decarbonisation should not risk EU competitiveness, massive job losses in a short time frame, or negate the affordability and choice that consumers enjoy today. A technology neutral approach based on a Well-to-Wheel analyses allows the regulatory framework the flexibility to adjust to new developments, be they technological breakthroughs, geopolitical events, or availability of resources.

5. Are the job losses in the ICE powertrain really going to be compensated by those in battery manufacture and electric motors?

The answer is no. Our study points at a net loss of 275,000 jobs in the powertrain domain until 2040 and reflects that while 80% of the job losses take place between 2030 and 2040, only 40% of all jobs created in the EV powertrain occur in the same time period.

Automation will play a considerable role in the future and, as illustrated by our Automotive Footprint Employment Portal, the employment growth in the EV domain after 2030 will significantly decrease. It should also be noted that 70% of the EV job creation is likely to be in the battery domain, which typically requires more academically schooled workers and less vocationally trained workers than the production of transmission systems, fuel tanks or other powertrain components.

As pointed out by the data in the Portal’s overview, there are job opportunities outside of manufacturing linked to the EV transformation, but these may be temporary in nature, require a different skill set or located in a different region.

CLEPA, furthermore, sees job opportunities related to connected and autonomous driving and other areas of digitalisation, but these jobs will be created independent of the type of powertrain, and will often concern different companies, people and regions. Therefore, to understand the employment impact and what is needed for a manageable transition, it is prudent to assess the jobs within the powertrain manufacturing domain.



CLEPA, the European Association of Automotive Suppliers based in Brussels, represents over 3,000 companies, from multi-nationals to SMEs, supplying state-of-the-art components and innovative technology for safe, smart and sustainable mobility, investing over €30 billion yearly in research and development. Automotive suppliers in Europe directly employ 1.7 million people in the EU.

[1] Includes battery electric vehicles, fuel cell electric vehicles, plug-in hybrid electric vehicles and full hybrid electric vehicles and excludes mild hybrids. Mild hybrids are included in the category of electrified powertrains.


#GreenANDJust: An effective mobility transition should be about emissions reductions and the social dimension, not a technology ban

  • Representatives from the European Commission, Council, the mobility industry and academia analysed the challenges and opportunities of the green and just mobility transition
  • A recent study commissioned by CLEPA and carried out by PwC Strategy& found that an EV-only approach, as currently proposed in the ‘Fit for 55’ package, will put over half a million jobs at risk
  • Organisations of the mobility technology industry ask policy makers to ensure a manageable transition to avoid disruption, and insist on the benefits of a mixed-technology scenario

in CLEPA, 12-01-2022


The upcoming weeks will mark important legislative milestones for the future of European road transport, and these are crucial times to consider what is at stake for the multiple pieces of the complex regulatory framework that is the “Fit for 55” package. To reach climate objectives, rapid electrification is a must, but how we get there requires careful consideration. Currently, around 600,000 automotive supplier jobs in the EU rely on the production of internal combustion engine powertrains. A recent study commissioned by CLEPA and carried out by PwC Strategy& found that an EV-only approach, as currently proposed in CO2 standards, will put over half a million of those jobs at risk. With the aim of taking a closer look at what these figures mean in practice and providing a platform for a compelling exchange of views by key stakeholders, CLEPA, the European Association of Automotive Suppliers, organised the public online debate, ‘The Sustainable Mobility Transformation – Green AND Just?’ on 11 January. 

European Commissioner for Jobs and Social Rights Nicolas Schmit provided the Keynote, raising the importance of assessing the employment impact of the sector transformation: 

“The automotive sector in general is a big deal when it comes to European total employment. Although this transition to climate neutrality will create opportunities, it will also disrupt our economy, and a certain number of sectors, with an impact on our labour markets… The green transition will only be successful if fairness, solidarity, and social measures are at its heart. The Commission welcomes CLEPA’s recently published study. We must produce precise forecasts regarding the employment, social and distributional impacts of this green transition. As described by CLEPA’s study, Europe IS on the transition path.” 

European Commissioner for Jobs and Social Rights Nicolas Schmit during his Keynote address on 11 January 2022

Asking the difficult questions, Financial Times’ Correspondent Joe Miller guided a panel debate with representatives from the Council, mobility and consumer sectors, as well as academia. Gábor Baranyai (Ambassador, Deputy Permanent Representative of Hungary to the EU), Laurianne Krid (Director General, FIA Region I), Stefan Pischinger (Professor at the RWTH Aachen, CEO of FEV Group) and Sigrid de Vries (Secretary General, CLEPA), looking at the results of our latest study, which Henning Rennert, Partner at PwCStrategy&, presented to the audience.  

The Electric Vehicle Transition Impact Assessment 2020-2040 is the first of its kind, evaluating three different transition scenarios until 2040, focused on powertrain production in the auto supplier industry. The assessment further identifies the risks and opportunities in seven major production countries for automotive components. 

On the key question, why automotive suppliers must have a say in the current mobility debate, it is crucial not to underestimate the employment capacity of the industry: The automotive sector is directly responsible for more than 8.6% of the overall manufacturing employment, with more than 60% of workers employed by automotive suppliers. This means 1.7 million direct jobs in the European supplier industry. The study found that a hurried transition will put over half a million of these jobs at risk. 

The study results also show that 70% of these jobs losses will occur in just a 5-year period, between 2030 and 2035, causing serious time pressure for SMEs and regions. While automakers have greater capacity to divest or insource activities to compensate for a loss of activity in the powertrain domain, automotive suppliers can react with less agility, as they are bound by long-term contracts with vehicle manufacturers. In addition, hundreds of specialised companies and SMEs have less access to capital to invest in the transformation of their business models. 

 “The automotive supplier industry is deeply connected with regional economies, composed of global leaders as well as many innovative SMEs. It is critical that we put automotive suppliers front and centre when managing the social and economic impacts of the transformation. We believe that a successful transformation starts with knowing the stakes. Obviously, emissions have to go down, and we fully support accelerated electrification as part of the solution, but we also need a transformation that is both Green AND Just”, says Thorsten Muschal, President of CLEPA and Executive Vice President of Sales and Program Management at Faurecia. 

CLEPA President Thorsten Muschal (Faurecia), setting the scene during the online event on 11 January 2022

Opportunities for a mixed-technology scenario 

The study shows a potential option for a brighter future for mitigating employment while still reaching climate objectives. According to the results, a mixed technology scenario would provide Europe with a safety net, consisting of all technology solutions that can play a role in reducing emissions. By complementing electrification, a mixed technology approach, allowing the use of sustainable renewable fuels, could deliver a minimum 50% CO2 reduction by 2030, while maintaining jobs, creating value-add and maintaining EU competitiveness in the global market. Additional volumes of net-carbon fuels can bring us to climate neutrality by 2050. 

The situation is very different from country to country. A one-size fits only approach would entail different levels of effort depending on the capacities of each Member State. In the study, Western European countries appear best placed to be strongholds in EV powertrain production, while employment in Central Eastern European countries will remain highly dependent on the internal combustion engine. “This sector is very significant for Hungary, it represents 5.6% of the GDP, and 170,000 jobs – that’s 4% of the total Hungarian workforce” explained Ambassador Gábor Baranyai, Deputy Permanent Representative of Hungary to the EU.  

CLEPA’s Secretary General, Sigrid de Vries, raises the stark warning from the study that an EV-only approach puts over half a million jobs at risk. “I believe there is not enough attention for the challenges associated with this transition. The emphasis often goes to the positives, of which there are many, but it doesn’t take away the fact that this transformation concerns real people and businesses. We see a focus on technology preferences, and we are concerned about the social dimension and the risks being downplayed.” 

According to Professor Stefan Pischinger, “Electromobility is an inevitable building block to achieve the CO2 reduction targets, but it doesn’t help the existing fleet – 1.6 billion vehicles worldwide – to become carbon neutral. The combustion engine itself is not the problem, but the fossil fuels. If the ultimate goal from policymakers is to achieve this CO2 reduction, which is absolutely necessary, we cannot leave out, for ideological reasons, different technologies that can achieve this.” He goes on to say, “If we say goodbye to the ICE, we miss the development and engineering where there is further potential for even cleaner and more efficient engines, other parts of the world are doing this, like China who has made this strategic decision.” 

Director General of FIA Region I, Laurianne Krid, also emphasised the need to provide drivers with the technical and relevant information to make their purchases and boost affordable options: “For mobility users it is very important to have an overview of the real carbon footprint, and what will allow us to do that is a ‘well to wheel’ approach. They need a real picture of what each technology can do.” She goes on to say, “In the next 10 years, people are not going to change their vehicle, it’s an important asset and a big investment for families,” further underscoring the need for affordable fuels to decarbonise the existing fleet.  

Automotive suppliers are on the move and ready to smooth the path towards a green and just mobility transition. Supplier companies, associated in CLEPA, have actively contributed to several assessments and are adapting their product portfolios, as illustrated by our most recent Pulse Check survey. In addition, the study´s methodology is complementary to previous studies (available through CLEPA’s employment portal, as it models figures from a company perspective.  

Find out more about the study



Moderator Joe Miller (Financial Times), Ambassador Gábor Baranyai (Deputy Permanent Representation of Hungary to the EU), Laurianne Krid (FIA Region I), Stefan Pischinger (RWTH Aachen, FEV Group), and Sigrid de Vries (CLEPA) during the panel discussion on 11 January 2022