Impact of electromobility on the European automotive industry

The automotive industry in the European Union is changing. The production of electric vehicles (EVs) and hybrid cars is increasing and the production of vehicles with internal combustion engines is decreasing. While in 2016 only 4.2% of the total number of cars produced were cars with alternative propulsion (hybrid, electric car, alternative fuels), in 2019 it was 10.6%. At the same time, vehicles with diesel engines are becoming less and less popular compared to vehicles with petrol engines - their position on the market went from 49.2% to 30.5% between 2016 and 2019.

The reason behind this change is the pressure on car manufacturers. The European Union is gradually stiffening the emission standards that newly produced cars must meet. At present, the EURO 6 standard is still applied - new cars cannot have carbon monoxide emissions higher than 500-1000 mg/km and nitrogen oxides higher than 80 mg/km and 60 mg/km for diesel engines and petrol engines respectively. According to some sources, the forthcoming EURO 7 standard will move these limits to 100-300 mg / km for carbon monoxide and 10 to 30 mg / km for nitrogen oxide. Although the final version of EURO 7 is not yet known, it is certain that the maximum permitted emissions for new vehicles will be reduced. EURO 7 is expected to come into force in 2025.

Manufacturers of parts and components for traditional internal combustion engines will be the most affected by the gradual transition to alternative vehicle propulsion (and especially to EVs).

Our analysis is based on data available through HitHorizons Financial Reports, which aggregate companies’ reported financials, credit checks, organizational structure, contact details, and more.

European automotive industry in a nutshell

The automotive industry is a significant part of the EU economy. It accounts for about 8% of the EU's GDP and employs over 14.6M people (6.7% of all people employed).

According to Eurostat, in 2019 the EU automotive sector sales were approximately 1.12 trillion euros. The automotive industry had the highest revenues in Germany (EUR 529B), France (EUR 144.8B), and Spain (EUR 75B).

Automotive industry sales in individual countries (2019; Eurostat)

Country Sales (mil. EUR) Total sales share Number of companies
Germany (until 1990 former territory of the FRG) 529,858 47.13% 2,769
France 144,861 12.88% 1,637
Spain 75,573 6.72% 1,591
Italy 65,356 5.81% 2,138
Czechia 52,725 4.69% 1,098
Sweden 50,648 4.5% 863
Poland 40,384 3.59% 1,725
Slovakia 31,456 2.8% 643
Hungary 30,622 2.72% 505
Netherlands 22,802 2.03% 767
Romania 22,658 2.02% 501
Austria 19,998 1.78% 220
Belgium 15,263 1.36% 461
Portugal 11,277 1% 689
Slovenia 4,033 0.36% 194
Finland 2,317 0.21% 230
Bulgaria 1,271 0.11% 136
Denmark 954 0.08% 156
Ireland 791 0.07% 140
Estonia 448 0.04% 75
Lithuania 434 0.04% 55
Croatia 197 0.02% 149
Latvia 230 0.02% 59
Greece 134 0.01% 439
Cyprus 15 0% 65
Total 1,124,305 100% 17,305

According to ACEA (European Automobile Manufacturers' Association), the total number of supporting and indirect jobs is 11.9M while the remaining 2.7M jobs are directly related to production. When it comes to jobs’ primary focus, 11 million are outside production and the remaining 3.7 million jobs are directly related to production.

Jobs in automotive industry (mil., ACEA)

Direct jobs in the automotive industry (2.7M) account for 8.5% of total employment in the EU. If we also take into account jobs that are outside the direct production of cars (3.7M), the share of the automotive industry in total EU employment would be 11.5%. The highest number of people employed directly in the automotive industry is in Germany (882,000), France (229,000), Poland (213,000), Romania (190,000), and Czechia (181,000).

Number of Employees (2018)

Created with Highcharts 10.1.0882,046882,046229,442229,442213,708213,708190,848190,848181,415181,415176,303176,303161,634161,634101,865101,86590,47390,47381,27381,27342,35842,35839,56939,56928,76828,76825,20425,20423,77723,77715,88715,88710,19910,1996,1636,1634,3174,3173,0003,0002,9192,9192,8802,8802,3172,3171,7371,737168168GermanyFrancePolandRomaniaCzech republicItalySpainHungarySwedenSlovakiaPortugalAustriaBelgiumNetherlandsBulgariaSloveniaFinlandLithuaniaDenmarkIrelandCroatiavEstoniaLatviaGreeceCyprus

In terms of individual countries’ employment, the dependence on the automotive industry varies. For example, in Slovakia, the share of the automotive industry is 15.8%, in Romania it is 15.8%, in Sweden 14%, in Czechia 13.7%, and in Hungary 12.9%. The EU average is 8.5%. For example, countries such as Spain, Italy, and France are below the EU average.

The share of employment in the automotive industry in the total industry in the country (direct jobs, 2018)

Created with Highcharts %15.8 %15.8 %15.8 %14.0 %14.0 %13.7 %13.7 %12.9 %12.9 %11.8 %11.8 %8.5 %8.5 %8.0 %8.0 %7.5 %7.5 %7.4 %7.4 %7.4 %7.4 %5.9 %5.9 %5.9 %5.9 %5.8 %5.8 %4.6 %4.6 %4.3 %4.3 %3.5 %3.5 %3.0 %3.0 %2.8 %2.8 %2.6 %2.6 %1.9 %1.9 %1.4 %1.4 %1.1 %1.1 %0.5 %0.5 %0.3 %0.3 %SlovakiaRomaniaSwedenCzech republicHungaryGermanyEUSpainPolandSloveniaFranceBelgiumAustriaPortugalItalyBulgariaNetherlandsFinlandLithuaniaEstoniaLatviaDenmarkIrelandCroatiaGreece

Overall, Europe ranks second in terms of the number of cars produced worldwide (2019) with a share of 24%, following China with a share of 28%. In 2019, 22M cars were produced in Europe, while China produced 26.1M vehicles.

2004 2019
China 4% 28%
Europe 32% 24%
North America 25% 18%
Japan / Korea 21% 14%
South Asia 6% 10%
South America 4% 4%
Middle East / Africa 2% 2%

What part of production is threatened by electromobility?

Identifying which companies are threatened by electromobility is not easy. Electric cars require less complex parts for their production. For example, while 1,400 parts and components are required to manufacture an internal combustion engine, just around 200 parts are required to manufacture an electric motor. Moreover, the production of electric engines alone is faster than the production of internal combustion motors.

The transition to electromobility will have the greatest impact on suppliers of certain types of components that are used in internal combustion engines but are not used in EVs. Of course, this transition will also have an impact on car manufacturers, but those can change production processes and switch to electric cars. In the case of suppliers, the manufacturers of engine blocks, shafts, filters, valves, gearboxes, oil systems, turbines, exhausts or fuel systems and other parts were identified as the most at risk. We will discuss this in greater detail at the end of this overview.

It is not easy to quantify how many companies are threatened by electromobility. On the one hand, it depends on what these companies produce. On the other hand it also depends on how flexible those companies are and whether they are able to transform themselves. Eurostat's statistical classification does allow to identify companies that produce particular types of components since all potentially relevant companies are placed into just one category of "Manufacturing of motor vehicles, trailers and semi-trailers".

That's why we looked at data available in our HitHorizons database. It should be noted that our data may differ from Eurostat’s, since we use different data sources. Moreover, not all financial data is available for each country and company. Nevertheless, HitHorizons data can provide an approximate yet more detailed picture. We have identified several subcategories of companies manufacturing parts and components for the automotive sector:

SIC code (mfg – manufacturing) Number of companies Sales Median sales (EUR) Number of employees
motor vehicle/car bodies 12,523 € 733.2B € 272,606 1.445M
motor vehicle parts/accessories 10,714 € 664.8B € 440,007 2.077M
tires/inner tubes 1,871 € 38.05B € 246,050 111,473
truck trailers 272 € 1.468B € 502,327 6,894
truck/bus bodies 228 € 5.387B € 626,508 18,303
auto/apparel trimming 164 € 112.3M € 257,724 1,059
automotive stampings 105 € 1.044B € 300,000 5,524
vehicle lighting equipment 57 € 2.125B € 3.6M 6,642
tire cord/fabrics 9 € 6.548M € 305,166 131
Total 25,943 € 1.446T 3.672M

The two largest sectors are “Manufacturing motor vehicle / car bodies” and “Manufacturing motor vehicle parts / accessories”, which account for more than 96% of sales and more than 95% of employment within all activities related to the automotive industry. The highest median sales are in “Manufacturing vehicle lighting equipment” (EUR 3.6M), but it should be noted that only a few dozen companies are engaged in this economic activity.

Subsequently, we tried to remove car manufacturers from the list of 25,000 companies since those usually have the highest sales and number of employees in each country. We also used the ACEA analysis, which specified the number of manufacturers in each country and branches / subsidiaries of the largest producers.

When we subtract the largest manufacturers (i.e. car manufacturers), in countries where they operate, they usually account for more than half of the sales of the entire automotive sector. For example, in Sweden, manufacturers account for more than 85% of the automotive sector's sales, in Germany for more than 70% and in France for more than 75%.

Country Sales of companies producing cars (EUR) Total sales (EUR) Median sales of whole automotive sector (EUR) Sales share of car manufacturers on whole industry
Germany € 626.9B € 883.7B € 790,000 70.9%
France € 122.5B € 161.3B € 336,101 75.9%
Spain € 41.99B € 69.01B € 205,154 60.8%
Italy € 34.23B € 65.31B € 273,000 52.4%
Sweden € 40.81B € 47.95B € 254,553 85.1%
Poland € 14.2B € 38.01B € 306,630 37.3%
Czechia € 18.41B € 34.68B € 35,068 53.1%
Slovakia € 19.35B € 31.66B € 90,057 61.1%
Hungary € 12.68B € 23.32B € 152,400 54.4%
Romania € 6.607B € 19.86B € 167,580 33.3%
Belgium € 10.25B € 16.64B € 299,381 61.6%
Austria € 5.371B € 15.8B € 500,000 34%
Netherlands € 8.454B € 13.73B € 425,000 61.6%
Portugal € 3.961B € 9.422B € 157,680 42%
Finland € 494M € 3.743B € 187,946 13.2%
Luxembourgh € 3.433B € 330,205
Slovenia € 2.069B € 3.177B € 241,500 65.1%
Bulgarria € 1.634B € 160,616
Ireland € 1.096B € 329,118
Denmark € 728.2M € 263,638
Croatia € 34.28M € 402.9M € 108,992 8.5%
Lithuania € 384M € 474,957
Estonia € 382.3M € 578,436
Greece € 364.1M € 327,081
Malta € 229.9M € 592,782
Latvia € 192.8M € 152,532
Cyprus € 74.09M € 580,054
Total € 968.3B € 1.446T 67%

There are no car manufacturers in countries such as Luxembourg, Bulgaria, Denmark, Cyprus, Ireland, Greece, Malta, or the Baltic countries. In all of the other countries just a couple producers account for a significant share of sales. In the 27 EU countries, producers (a few dozen companies) account for 67% of sales. The remaining more than 25,000 companies generate revenues of approximately EUR 500B. However, we do not know exactly how many of these companies are at risk because of electromobility, since this list of companies includes manufacturers of bodywork, tires, and other parts, which will continue to be in demand.

Among these companies are also larger group suppliers, which operate in several countries and are among the suppliers with high sales. Such companies include, for example, Hella, Continental, Michelin, Bosch, Mahle, ZF, Magna, Schaeffler, Plastic Omnium, Faurecia, Valeo, Brose, Adient, Lear Corporation.

Company Products
Hella Manufacturing of electronics and lights
Continental Manufacturing of tires, brake systems, electronic stabilization systems, injection systems for internal combustion engines, tachographs
Michelin Manufacturing of tires
Bosch Manufacturing of automotive parts (including brakes, controllers, electronic units, electronics, fuel systems, generators, starters, and control systems)
Mahle Manufacturing of air conditioning, ventilation, parts of the drivetrain, and radiators
ZF Active passive safety, chassis, gearboxes
Magna External parts and solutions for aerodynamics, electronics, seats, lights
Schaeffler Rolling bearings
Plastic Omnium Internal and external plastic parts for cars
Faurecia Designs and manufacturing of seats, exhaust systems, interior systems (dashboards, center consoles, door panels, acoustic modules) and decorative elements
Valeo Production of spare parts for cars and development of smart mobility
Brose Mechanics and electronics (door parts, electric motors, mechanical seat parts)
Adient Manufacturing of seats
Lear Corporation Electrical systems and seat production

Some of these companies, such as Bosch, Valeo, Mahle or ZF, may be at a greater risk, but only to some extent, since most of them have a broad portfolio of products for the automotive industry.

The following table has a list of specific parts that are used in vehicles with internal combustion engines but not in EVs. Each component has examples of specific manufacturers. Most of them have a broad product portfolio and do not focus only on components that are at risk because of the growing demand for EVs.

Car parts
ICE powertrain
Camshaft AE, Freccia, Febi, thyssenkrupp, Kolbenschmidt
Crankshaft thyssenkrupp
Cylinder head Mahle, Kolbenschmidt
Engine block Car manufacturers
Engine mounting Car manufacturers
Oil system Mahle, Ridex
Spark plug Bosch, Hella, Valeo
Turbocharger Continental, Bosch-Mahle (jointventure), Garrett
Fuel tank Bosch, Mahle
Piston Mahle, Kolbenschmidt
High-presure fuel pump Bosch, Ridex
Connection rod Ridex, Febi, Metzger
Clutch pulley Febi, Valeo, Hella
Clutch Luk, Ridex, Sachs, Valeo
Exhaust system
Catalyst Faurecia, JMJ, BM catalysts (UK), Bosal
Gasoline particulate system Faurecia, Bosal, Ridex
Intake Manifold Faurecia, Metzger, Ridex
Exhaust Manifold HJS Emission Technology
Tail pipe Bosal, Eberspächer

A greater focus on electric cars will harm only some manufacturers. According to our calculations, approximately 67% of the car industry's revenues in the EU are large automakers, for which we expect only a weak impact of the transition on electromobility. The change will negatively affect companies that produce parts for cars with internal combustion engines (gearboxes, fuel tanks and others) that are not used in electric vehicles. Companies that manufacture these parts like Faurecia, Continental or Bosch and others will have to change their production to maintain their market position.

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