Written October 17, 2022 at 08.00Updated 17 October 2022 15:56
How is the auto industry trying to bounce back after the series of crises we’ve been through since the start of 2020?
Our sector is the victim of the most serious crisis in its history at the moment when it is undergoing a historic change. The health crisis has led to disruptions in the supply of raw materials from Asia and galloping inflation in price. To limit its dependence on Asia, the auto industry is trying to better control its supply chain. Faced with the shortage of electronic components, manufacturers are looking to buy more locally.
This is the goal of the European Union, which is launching its Chips Act action plan with the aim of quadrupling its production of electronic chips by 2030. To avoid shortages of rare metals needed to make batteries, carmakers are also trying to lock down their supply chain, sealing supply agreements with global suppliers. At the same time, they focus their R&D on the design of tomorrow’s battery, with little or no rare metals. Renault, Valeo and Siemens are working on this.
Will the sector be ready for the end of thermal vehicles in 2035, decided by the European Commission?
The industry is preparing to meet this unprecedented challenge. We have largely exceeded the goal of the strategic contract for the automotive sector signed in 2018 with the government, which was to quintuple electric cars by five by 2022. The market share of electrified vehicles has multiplied by more than ten in five years! The entire automotive ecosystem is investing in vehicle electrification. Renault and Stellantis invest in producing batteries and electric motors in France.
This all-electric goal is accompanied by uncertainty about the prohibitive price of the electric vehicle, 50% more expensive than its thermal counterpart.
Luc Chatel, President of the Automotive Platform (PFA)
But this all-electric goal is accompanied by uncertainty about the prohibitive price of the electric car, 50% more expensive than its thermal counterpart, about the charging station infrastructure and about the capacity of subcontractors to follow the manufacturers. We therefore regret the European political choice to put an end to a century of thermal motorization, while the preservation of rechargeable hybrids made it possible both to fulfill all applications and to maintain thermal vehicles. We recommended having an energy mix that combines electricity, hydrogen, biogas, synthetic fuels and rechargeable hybrids. But Europe decided otherwise.
How do you assess the social consequences of the industrialization of electric cars?
The transition from thermal technology to the electric motor, of simpler design, will lead to the disappearance of a certain number of trades, with consequent significant job losses. In five years, the car industry has already lost 50,000 jobs. It is estimated that at least 65,000 jobs are threatened by 2030. At the same time, other professions are emerging. This is what is at stake in the battle for retraining and education that we fight together with the public authorities.
Besides the energy transition, what other major transformations does the sector have to face?
The sector must face two major challenges: the digital revolution with the smart and connected vehicle, as well as the societal transformation of new uses of the car and mobility. The connected car requires enormous software development. On a new car filled with an astronomical number of electronic components there are more than 100 million lines of code, that’s more than in an airplane!
New applications of mobility are moving the sector to an “Industry as a Service” logic. We will sell less and less vehicles and charge more and more for mobility services. Manufacturers are developing offensive offers in this area. This is the case of Mobilize, at Renault, which aims to account for 20% of the group’s revenue by 2030, while Free2Move, the Stellantis brand, wants to expand its global presence to 15 million users in the same term.
Where is your relationship with government agencies on the best way to address these challenges?
The challenge is to bring France into this second automotive revolution. In order to meet this challenge and guarantee our technological sovereignty, it is essential to provide the means within the framework of ambitious public-private partnerships to massively locate the investments linked to the mobility of the future in France. These investments are estimated in Europe at more than 200 billion euros within ten years. In order to conquer the maximum in our territory, we must continue to tackle the lack of competitiveness of the French site through extraordinary measures.