Is France a winner in electric cars?

0-Ventes-de-VE-senvolent-1024x768.jpg

While, since 14 July, there has been a feeling that the chances of Brussels confirming the objective of putting an end to the marketing of vehicles powered by combustion engines or hybrids as early as 2035 were high, the year 2021 is ending with increased doubt. Indeed, as this scenario becomes clearer, everyone tries to project themselves into the next eight to fifteen years and the prospects examined turn out to be rather unenthusiastic and give arguments to all those who wish to counterbalance the 'climate emergency' with a 'social emergency'.

The studies that multiplied in 2021 on the question of the industrial and social consequences of electrification are both objective evaluations of the consequences of the choices that will be made and means of influencing the said choices by making the different scenarios studied appear to be unequally beneficial or harmful to the different territories and/or components of the industry.
For example, Clepa asked PwC to study the decline in employment in the equipment and subcontracting industries by considering a scenario called "multi-technology" and two others called "EV-only" (the one proposed by "Fit for 55") and "radical EV-implementation", where we would like to see a reduction in CO2 emissions from vehicles put on the road from 2030. Obviously, the last two scenarios lead to phenomenal job losses (-275,000 to -500,000 by 2040).

The "mixed-technology" scenario allows for a smoother or less unbearable transition, as added value is maintained until 2040 thanks to hybrids in particular. Synthetic fuels also make it possible to preserve some of the jobs associated with internal combustion engines. The study also takes the trouble to differentiate between national situations by detailing the scenarios for seven countries, namely Germany, Italy, France, Spain, the Czech Republic, Poland and Romania. It shows that Western European countries (and France in particular) would be favoured by the electric vehicle (+56.2 billion euros of added value by 2040). "Conversely, the report states, Central and Eastern European countries would be the first victims of the decline in the production of vehicles powered by internal combustion engines. 

As many observers have already noted, the French Presidency of the European Union will have to manage the process of adopting the climate package proposed on 14 July over the next six months. From this point of view, Clepa is playing out the divide between countries with manufacturers that are trying to compensate for part of the decline by locating or relocating part of the volumes and value associated with the development of electricity on national territory and the others that, for the time being, seem to have to stay away from this movement. Thus, the French and European initiatives that Renault or Stellantis have taken to develop an electric vehicle ecosystem in the north-eastern quarter of the country will be seen as threats in Slovakia, the Czech Republic, Poland and Spain.

In the same way that equipment manufacturers and subcontractors would see their share of the value they provided for carmakers shrink, the former beneficiaries of relocation would be the darlings of the electric farce. By giving them solid reasons to fear this, Clepa is seeking to make these states militants of their "multi-technology" scenario.

From this point of view, the study carried out by AlixPartners and presented last week to the PFA may seem to partially support Clepa's view, although it looks ahead to 2030 and for this reason does not give priority to a 100% electric vehicle scenario: the study's reference scenario for 2030 is one in which the electric vehicle accounts for half of the mix, hybrids for 30% and combustion engines for the remaining 20%. Because the electric vehicle is associated with a manufacturing cost that rises from 15,000 to 24,000 euros, vehicles are more expensive and fewer are sold. However, the impact is greater for subcontractors and equipment manufacturers, who only get a minor share of the development of activities and jobs associated with e-Powertrain, electronics, batteries, etc.

Indeed, as with vehicle design, everything indicates that manufacturers will either seek to internalise these activities entirely or to set up joint ventures of the ACC type in order to progress in this direction. Thus, the negative effects are structural, whereas the positive effects are conditional and will only exist if these internalisation and related skills development strategies are successful.

Even if the work of AlixPartners focuses on hybrids and indicates that, like battery chemistry and charging stations, the fuel cell can be considered as an opportunity for growth and diversification, we are quite far from the Clepa "multi-technology" scenario that seeks to rally the CEECs and basically to save the combustion soldier.

The PFA is clearly dominated by battery electrics and considers that the "Fit for 55" is coherent and will only need to be adjusted at the margin. In a way, the PFA seems to confirm the results of PwC's work for Clepa: France is, in the European landscape, one of the countries that could suffer the least from the electric vehicle transformation in terms of added value and jobs. 

If this is the case, it is firstly because we no longer have much to lose, given the damage caused by relocation. Secondly, if the Germans are willing to consider that our nuclear electricity is, if not 'clean', at least decarbonised, then France can make a very strong case for hosting an exporting battery industry and a high-volume battery electric vehicle assembly.

Even if the PFA and Bercy intend to manage as best they can the negative effects of this change on companies and regions, it is not fundamentally a question of asking for delays and/or suggesting that the inevitable can be avoided by developing biofuels. Seeking to reconvert companies externally at least as much as in the automobile industry and to revitalise territories damaged by the closure of major sites has an aspect of despair for part of the sector, but at least we are not in the business of "at the same time" and we are not trying to spare the goat of the existing and the cabbage of the future.

The interest of the Clepa study at a time when France is about to take over the Presidency of the EU is to show that, in order to promote an electric option in the EU, which is undoubtedly a fairly good option for the country, it will be necessary to fight and rally the member states that have factories but no manufacturers. This promises to be quite a tough fight and it will obviously be necessary to share the electric cake, which the new member states have some reason to fear being deprived of.

20/12/2021

The weekly column by Bernard Jullien is also on www.autoactu.com.

      

 

  
GIS Gerpisa / gerpisa.org
4 Avenue des Sciences, 91190 Gif-sur-Yvette

Copyright© Gerpisa
Concéption Tommaso Pardi
Administration Juan Sebastian Carbonell, Lorenza MonacoGéry Deffontaines

Powered by Drupal, an open source content management system