bright sparks

Shock Therapy for Auto Suppliers

  • Why it matters

    Why it matters

    The electromobility revolution threatens around a million jobs in Germany, particularly in the south of Germany, the Fraunhofer Institute estimates.

  • Facts

    Facts

    • Global management firm McKinsey estimates that in 14 years 65 percent of contemporary models will no longer be using internal combustion engines.
    • Germany’s federal states have mooted the possibility of a complete ban on the sale of combustion engines by 2030.
    • Electric cars don’t need a large part of the components which are currently being made in mid-sized parts businesses.
  • Audio

    Audio

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Fertigung Elektroauto BMW i3
BMW workers building i3 model electric cars on the assembly line in Leipzig. Photo: DPA

In Germany, the economies of entire regions depend on the internal combustion engine for their income. One million jobs are tied to suppliers that build pistons, exhaust systems, or other components for combustion engined vehicles.

Electric cars have been slow off the mark, but they will soon be a serious threat to petrol and diesel engined vehicles. To suppliers, the message is clear: adapt or die.

Stefan Wolf, the head of component supplier ElringKlinger, saw the revolution coming, but he jumped too soon. Long before other suppliers, he invested heavily in the electric car. Ten years ago he had entire production lines set up, producing electrical parts and components.

But the market wasn’t quite ready for the electric car. Nobody had heard of nitrogen dioxide or Volkswagen’s emissions-cheating software yet.

“Nobody wants to drive an electric car,” grumbled Mr. Wolf in 2014. He’s been left sitting on follow-up costs of €13 million ($14.2 million) in the last two years alone. Now electromobility components are slowly making their way back into Elring’s portfolio – but in 2015 they accounted for less than one percent of the company’s turnover.

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