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ifo Institute study projects ban on combustion engines in 2030 would affect 600K jobs in German manufacturing

In Germany, legislation banning permits for new cars and light trucks with internal combustion engines as of 2030 is currently under consideration. A new study by the ifo Institute projects that such a ban could lead to significant losses in terms of jobs and added value in Germany. More than 600,000 jobs, or 10%, of jobs in German in manufacturing would currently be directly or indirectly affected by a ban. In the automotive industry alone a ban would endanger 436,000 jobs, while up to 130,000 jobs at small and medium-sized companies would be at risk.

Such a ban would also impact a total of 13% (amounting to around €48 billion) of gross value added. The study was commissioned by the German Association of the Automotive Industry (VDA).

The study, “Effects of a prohibition on the registration of passenger cars and light commercial vehicles with an internal combustion engine” (full study in German only), first explores the potential negative consequences and risks of such a ban in terms of performance and employment in German manufacturing. This is followed by an analysis of innovation efforts in manufacturing in the field of combustion engines and alternative technologies and then a review of the environmental impact of a ban.

The first part of the study is based on detailed official manufacturing statistics, determining the importance of combustion engine technology for value added and employment. ifo derived the share of international patents for different types of propulsion technology filed by German industry compared to its most important competitors. To estimate the environmental effects of the ban, the economic research group developed a forecasting model to compare carbon dioxide emissions with and without the contemplated legislation through the year 2050.

Based on the structure of production in 2015, at least 457,000 employees are involved in producing types of products which would be directly affected by the ban (e.g., diesel engines). This is equivalent to 7.5% of overall manufacturing employment in Germany.

Including product groups such as transmissions systems that would be indirectly affected, the number of potentially affected jobs rises by 163,000 or an additional 3% of overall manufacturing employment.

These jobs are mainly clustered in the metal industry: 102,000 employees in metal processing produce parts destined for vehicles with combustion engines. Taking the direct and indirect channel together, a total of at least 620,000 employees would be affected by the ban, which represents over 10% of total German manufacturing employment.

Among the 457,000 directly affected jobs, 31,000 jobs in small and medium-sized enterprises would be highly at risk. These firms can be expected to face larger difficulties than large companies in developing new alternative fields of business against the back-ground of a major shift in propulsion technology, ifo said. This share is substantially larger among indirectly affected jobs: Here 101,000 out of 163,000 jobs are situated in small and medium-sized enterprises and highly concentrated among automotive suppliers in the metal industry.

In interpreting these figures, one has to bear in mind that not the entire workforce and value-added “at risk” would necessarily vanish. Some parts, for example, are also used in heavier trucks and buses, which would probably not be subject to the ban. In addition, new jobs in the areas of alternative propulsion technologies in Germany would help to limit employment reduction, at least in the aggregate.

Considering the development during the period 2011-2015, we find that those groups of products within automotive manufacturing that would not be affected by the ban display substantially stronger growth rates than affected product groups – one can therefore already observe a technological shift within the current regulatory setting. A similar finding applies to growth rates for product categories, which are used in electric vehicles – although the employment and value-added share of these vehicles and components currently only accounts for a miniscule share of employment and value-added in German manufacturing.

—ifa report

Innovation. One argument frequently made in favour of a ban on combustion engines is that the German automotive industry embraced alternative engines too late and too tentatively due to the technical leadership it enjoyed in combustion engines.

However, using patent data for combustion engines and alternative technologies over the period 1995-2015, ifa found that the German share of patents among the leading automotive nations in the most recent period 2010-2015 in the area of electric vehicles was the highest with 34% of patents; while a similar market share can be seen in hybrid vehicles (32%).

Furthermore, the situation in these fields is not fundamentally different to the share of combustion engine patents (40%). Among German combustion engine patents, ifa found that more than two-thirds of all inventions focus on making engines more fuel-efficient. Therefore, the consultancy concluded, there is no evidence of any lack of innovation incentives in the area of alternative propulsion technologies compared to competing countries.

Overall, the technology base for alternative propulsion systems in Germany is sufficient. Focusing on the required infrastructure and demand-oriented policy-measures, however, could accelerate the diffusion of innovative products in this field. From the perspective of innovation policy, therefore, the rationale for banning cars and light trucks with combustion engines appears weak.

—ifa report

CO2 emissions. For CO2 emissions, ifo developed a model predicting the well to wheel (WTW) emissions of cars and light trucks through 2050. The effect of the ban is calculated using the difference between a “business as usual” (BAU) scenario and a setting in which the ban is implemented.

For cars, the model predicts a cumulated 32% reduction in CO2 emissions within the forecast horizon (2030-2050) due to implementation of the ban compared to the BAU scenario. Even in the BAU scenario, a reduction in emissions of around 53% is achieved due to expected technological advances and the composition of the vehicle fleet. The expected results for local emissions are analogous. Disadvantages of electric vehicles are associated with their production (amount and composition of materials), the required resources including water-usage, as well as adverse effects on the environment (acid impact, particulates).

In the first year of the ban, instead of the predicted 250,000 new electric vehicles in the BAU scenario, 3.3 million new electric vehicles would have to be purchased to compensate for the otherwise newly registered vehicles with combustion engines. ifo suggests that this would put enormous pressure on charging infrastructure, for which a recent study proposes a ratio of about 1 charger for 30 electric vehicles.

With respect to the electricity market, by as early as 2031 the registration ban would lead to an additional 1.1% increase in the required electricity generation in Germany overall, which would have to be generated completely from renewable sources to still meet the reduction targets for energy generation.

This additional (renewable) electricity demand increase would amount to around 7.6% of the overall German electricity generation by 2050. This would result in an increase in average electricity prices of around 0.5%, according to the forecast.

It is important that climate policy is neutral in terms of technology; in other words that it sets climate protection goals without stipulating the technologies to be used to achieve them. Preventing competition among environmental protection technologies with bans is a waste of resources and does a disservice to climate protection.

German manufacturing is one of the top international competitors in alternative drive technologies. The widespread view that German automotive manufacturers aren’t putting enough effort into alternative drive technologies due to their strong position in combustion engines just isn’t backed up by the data on their actual innovation efforts. A ban on combustion engines simply cannot be justified by citing a lack of innovation on the part of the German automotive industry. Measures that accelerate the market penetration of innovative products are far more expedient than bans.

—ifo President Clemens Fuest

ifo’s figures highlight the German automotive industry’s strong technological base in both conventional and alternative drive systems. This is due to our massive investment in research and development, which amounts to 39 billion euros per year. Modern combustion engines will still be an indispensable component of mobility concepts in 2030. That is why the German automotive industry’s goal is to make the full range of driver technologies more efficient. A highly efficient combustor, perhaps based on renewable fuels in the future, and electro vehicles are not contradictory concepts, they are complementary paths. Both are necessary if ambitious climate goals are to be achieved.

As the home of the automotive industry, Germany should not favour one type of drive system over another. That just wouldn’t make any sense economically, ecologically or socially. It is the task of politics to define goals, not to dictate how to achieve them. Instead, a political framework should be created that prevents technological bias and ensures freedom of choice in the market.

—Matthias Wissmann, President of VDA



This looks like an extremely biased study. Who is paying VDA?


What these studies never say is there are new jobs created in the RE sector to offset the fossil jobs. For example; many of the Texas oil field workers who lost their jobs because of the oil glut are now working in wind energy, in Texas.


What a F'ing moron! Does he think elves are going to build the EVs? What the ACTUAL F**K???

Seriously, you moron, those people would build EVs and electric motors rather than ICE cars and ICE engines. I suppose going from manual transmissions to automatics destroyed 250,000 jobs too????

Jesus H Christ, this guy is too stupid to handle anything sharper than a crayon.


That would be a suicide of the auto industry. Peoples won't buy evs in quantity and they will keep and repair their old ice car for 30 years. We can clearly see that actually 98% of car buyers buy gasoline/diesel and carefully skip pure evs, except in blue california at 4%. Also big trucking can't go to pure battery except some city buses.

Their master plant is to reduce the profit margin of petrol industry but collect higher taxes on petroleum for green policies and they also collect taxes from goverment regulations. All this fraud scheme is partly organized by media outlets like green car congress, autobloggreen and green car reports. Also silicon valley is deeply implemented in this taxation scheme.



You could add many thousand new jobs to install-maintain solar and wind REs with appropriate storage, many thousand ultra quick 400 and 800 KW charging facilities, many million ADVs subsystems, many new mega battery factories, many million on board advanced electronic systems.

You could also add FCEVs/H2 factories?


Does ban on ICE suppose ban on hybrids including serial? May be the study assumptions are based on wrong fact of total ban? As far as I know LDVs should be electrified by 2030 but still with ICE.

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