E-Mobility: a Green Boost for European Automotive Jobs?

E-mobility: A green boost for European automotive jobs?

Results presentation

JUNE 2021 Study based on long journey around the topic

Shifting Gears in Auto Manufacturing

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BCG Report Study on Studies for Germany, Additional country "Shifting Gears" European level Spain and Poland studies and scenarios

September 2020 Start December 2020 Start April 2021 July 2021

BCG report about the shift Study of the Automotive Dedicated country level Additional country level in Automotive job development in Europe studies in collaboration studies for other important manufacturing in collaboration with ECF with local organizations markets in consideration Detailed analysis of the Analysis of all major trends Studies considering the Idea for additional scenario necessary labor units that are driving the Auto highly different situation analysis based on behavior between ICEs and BEVs industry over next 10 years across EU countries in EU vs. China and USA

Interviews with Job distribution across Trends along industry various Auto experts functions & industries sectors and functions

1 Industry sectors and job families primarily affected Job categories

2 Major trends influencing job development in Auto industry 2 Major trends influencing job development in Auto industry 5 job categories based on 31 affected job families Spain & Poland preliminary 1 Industry sectors and job families primarily affected >45 expert interviews conducted to validate findings Industry cluster Eight major trends are driving job changes Total number of jobs with industry split Major trends Quantification 8 industryin Europe [Numbersclusters in M] based on 26 industries in scope 0.7 Platform members Industry experts BCG experts 31 affected job families clustered in 5 categories along the value chain … Retirement -2.1% -2.4% -2.4% -2.3% Retirement factor (p.a.) 0.2 26 affected sectors grouped in 8 overarching industry clusters … 3.9 … whereof, 0.7M (13%) jobs are associated with engineering, which Total number of jobs with industry split Fluctuation includes 9 company functions like Power units/electronics researcher Fluctuation -1.9% -1.4% -1.4% -1.4%

[Numbers in M] … whereof, 0.47M (28%) jobs are associated with OEMs, factor (p.a.) Overarching

which includes companies like VW or Daimler automotive Core 0.47 … whereof, 0.2M (4%) jobs are associated with procurement, which Market Production Sales vol. Car parc … whereof, includes(15%) 5 jobscompany are associated functions likewith Production ICE-focused material suppliers procurer, -0.4% 0.9% 0.1% -1.8% -0.7% -1.5% -0.3% 0% 0.7% 0.5% 1.0% 1.1% 0.25M volume volume (p.a.) (p.a.) (p.a.) 5.6 which includes companies like Umicore Automotive Catalysts … whereof, 3.9M (69%) jobs are associated with production & service ops., Technology Demand for 0.25 … whereof, 0.52Mwhich (31%) includes jobs are5 company associated functions with Non like- ICEProduction suppliers material, procurer 11% 11% 11% 11% software eng. evolution (p.a.) which includes companies like Continental 0.52 … whereof, 0.3M (6%) jobs are associated with sales, which includes 5 Car Content 0.3 1.0% 1.1% 1.9% 1.2% 0% 0% 0% 0% portfolio … whereof, 0.21Mcompany (12%) functions jobs are associatedlike sales analyst with Maintenance & repair, Product mix per car (p.a.) 0.4 (p.a.) 1.69 which includes companies like ATU … whereof, 0.4M (8%) jobs are associated with other functions, e.g., Productivity 0.8% 1.6% 2.3% 1.0%

… whereof, 0.21MHuman (12%) Resources jobs are associated with Equipment & Services, Productivity (p.a.) Adjacent industriesAdjacent which includes equipment and machinery companies like SEW

Industry Industry specific BEV vehicle High value-add 0.21Engineer- Procu- Prod./Ser- Sales Other … whereof, 0.01M (0%) jobs are associated with Energy production, Shift to EV 32% 34% 77% 33% production 100% 100% 100% 100% in battery ing rement vice Ops. (p.a.) production 0.21 0.01 0.00 0.01 which includes energy producers like EON or RWE Job Offshoring Source: EuroStat; BCG 14 Copyright by © 2021 BostonConsulting Group. rightsAll reserved. … whereof, 0.00M (0%) jobs are associated with Energy infrastructure, 0% -0.8% -1.4% -1.5% of jobs 10 interviews conducted >15 interviews conducted >20 interviews conducted offshoring (p.a.) which includes companies like EVBox or Chargepoint

OEMs ICE- Non Maint./ Equip. Energy Energy Recy- Positive impact on job demand Negative impact on job demand No impact on job demand Copyright © 2021 by Copyright by © 2021 BostonConsulting Group. rightsAll reserved. Source: BCG 5 2019 as baseline year, Source: IHS Markit; BCG 15 Copyright by © 2021 BostonConsulting Group. rightsAll reserved. focused -ICE Repair & Serv. prod. infr. cling … whereof, 0.01M (1%) jobs are associated with Recycling, supp. supp. which includes battery recycling companies like Umicore

Over 45 interviews with Job distribution across 26 Trends and industry- platform members, industry sectors and 31 job specific drivers for the industry and BCG experts families next ten years

Source: BCG 2 Copyright by© 2021 Boston Consulting Group. All rights reserved. Europe in development Job Source: BCG Source: Norway + UK + 1. EU27 X.XM Employees in scope (Basis (Basis 2020) scope in Employees 5.7M 1 from '20from – '30 … '30 … presented along five five along presented … Net impact Recommendations &replacementsShifts Major trends sectors Industry of job job of development until 2030 influencing job development in industry Auto building blocks building and and for companies companies for and governments job job families in in industry and sectors job families primarily affected 2 1 5 4 3 3

Industry sectors and job families primarily affected 1

Major trends influencing job development in Auto industry 2

Net impact of job development until 2030 3

Transition over time, across industries, job families, regions 4

Recommendations for companies and governments 5

5.65M employees across 8 industries and 5 functions 2 Total number of jobs in Job category Europe 2020 [in K] Production/ Engineering Procurement Sales Other Total Industry cluster1 Service Ops. 2020 OEMs 119 33 759 65 108 1,084 19%

ICE-focused 666 12% suppliers 123 28 427 28 59

Non-ICE 2,286 40% suppliers 380 80 1,554 92 180

Core automotive automotive Core Maintenance 10 51 835 71 51 1,019 18% & Repair

Equipment 97 22 238 47 35 439 8% & Services

Energy 7 1 34 1 5 49 1% production

Energy 2 1 16 1 2 22 0% infrastructure

Material

Adjacent industries Adjacent 9 9 54 9 9 90 2% recycling

748 13% 225 4% 3,917 69% 316 6% 449 8% 5,654 1. Based on 26 industries 2. Based on 31 jobs families

Source: EuroStat; BCG 5 Copyright by© 2021 Boston Consulting Group. All rights reserved. 1 Industry sectors and job families primarily affected Industry cluster 8 industry clusters based on 26 industries in scope

26 affected sectors grouped in 8 overarching industry clusters …

Total number of jobs with industry split [Numbers in M] … whereof, 1.08M (19%) jobs are associated with OEMs,

which includes companies like Renault-Nissan and Tesla Coreautomotive 1.08 … whereof, 0.67M (12%) jobs are associated with ICE-focused suppliers, 0.67 which includes companies like Umicore Automotive Catalysts

2.29 … whereof, 2.29M (40%) jobs are associated with Non-ICE suppliers, which includes companies like Continental

… whereof, 1.02M (18%) jobs are associated with Maintenance & repair, 5.65 which includes companies like Mobivia Groupe

… whereof, 0.44M (8%) jobs are associated with Equipment & Services,

1.02 Adjacent industries which includes equipment and machinery companies like SEW

0.44 … whereof, 0.05M (1%) jobs are associated with Energy production, 0.05 0.02 0.09 which includes energy producers like EON or RWE

… whereof, 0.02M (0%) jobs are associated with Energy infrastructure, which includes companies like EVBox and Chargepoint OEMs ICE- Non Maint./ Equip. Energy Energy Recy- focused -ICE Repair & Serv. prod. infr. cling … whereof, 0.09M (2%) jobs are associated with Recycling, supp. supp. which includes battery recycling companies like Umicore

Source: EuroStat; BCG 6 Copyright by© 2021 Boston Consulting Group. All rights reserved. 1 Industry sectors and job families primarily affected Industry cluster Largest automotive OEMs account for ~1.1M jobs in Europe

Total employees of automotive OEMs in Europe

OEM European employees ‘000 Factories (2021)

Volkswagen 417 26

Stellantis 172 11

Daimler 130 24

Renault-Nissan 103 13

BMW 88 6

Ford 45 4

Volvo 41 4

JLR 40 4

Toyota 25 3

Hyundai 15 2

Legend: Other 9 13 Light vehicle factories Total ~1,084 110

Source: IHS Markit 2021; OEM website and annual reports; Press search; ACEA; BCG 7 Copyright by© 2021 Boston Consulting Group. All rights reserved. 1 Industry sectors and job families primarily affected Backup Industry cluster 26 affected industries defined for detailed analysis along 8 industry clusters

Core automotive Adjacent industries

OEMs Non-ICE Equipment Energy suppliers & Services infrastructure

Manufacture of motor vehicles Manufacture of bodies Equipment & Machinery Fuel infr. (Manuf. & Service)

ICE-focused Manuf. of electrical & electronic equip. Industrial Service provider Fuel infr. (Instal. & Ops.) suppliers Manuf. rubber tires and tubes Charging infr. (Manuf. & Service)

Manuf. bearings, gears & driving elements Manuf. computers & equipment Charging infr. (Instal. & Ops.)

Manuf. cooling & ventilation equipm. Manuf. e-motors & generators Manuf. pumps & compressors Manuf. electric lighting equipm. Energy Material Manuf. of batteries & accumulators production recycling Manuf. of refined petroleum products Recovery of sorted materials Shaping & processing flat glass

Manuf. of other parts & accessories Production of electricity Transmission of electricity

Maintenance Distribution of electricity & Repair Trade of electricity Maintenance & Repair of vehicles Extensive change in industry expected

Source: EuroStat; BCG 8 Copyright by© 2021 Boston Consulting Group. All rights reserved. 1 Industry sectors and job families primarily affected Job categories 5 job categories based on 31 affected job families

Total number of jobs with funcitonal split in Europe [Numbers in M] 0.7 31 affected job families clustered in 5 categories along the value chain … 0.2 3.9 … whereof, 0.7M (13%) jobs are associated with engineering, which includes 9 company functions like Power units/electronics researcher

… whereof, 0.2M (4%) jobs are associated with procurement, which includes 5 company functions like Production material procurer 5.7 … whereof, 3.9M (69%) jobs are associated with production & service ops., which includes 5 company functions like Production material procurer

… whereof, 0.3M (6%) jobs are associated with sales, which includes 5 0.3 company functions like sales analyst 0.4 … whereof, 0.4M (8%) jobs are associated with other functions, e.g., Human Resources

Engineer- Procu- Prod./Ser- Sales Other ing rement vice Ops.

Source: EuroStat; BCG 9 Copyright by© 2021 Boston Consulting Group. All rights reserved. 1 Industry sectors and job families primarily affected Backup Job categories 31 job families defined within the affected company functions

Engineering Procurement Production/Service Sales/Marketing

Power units/electronics researcher Production material procurer Production planner Sales manager/planner

Power units/transmission developer Production facilities procurer E-motor production planer Sales/after sales staff

Electrical power unit developer Services & transport procurer Battery/Cell production planer Sales analyst

(Vehicle) concept developer Vendor parts procurer Operational production staff Marketing strategy staff

Thermal concept developer Controlling/accounting staff High voltage production staff Product marketing staff

(Vehicle) feature developer Machine operator Digital Marketing staff

(Vehicle) Battery/Cell developer Logistics planner Market analyst

Software/system developer Operational logistics staff Service technology staff

System/function developer (Production) maintenance staff

Batterie mgmt. developer Charger maintenance staff

Electrical/mechatronic designer (Vehicle) mechanic

Development… project manager (Vehicle) electrician

Business partner manager Charger installation staff

Upcoming/Growing (Sub)-Job families

68% of jobs are in six European countries

Total number of jobs with country split in Europe [Numbers in M]

1.7 ~1.7M employees in Germany, whereof ~0.8M for supplier and ~0.6M for OEMs

~0.5M employees in UK, whereof ~0.2M for supplier and 0.5 ~0.2M for maintenance & repair 0.5 68% 0.4 ~0.5M employees in France, whereof ~0.2M for supplier 5.7 0.4 and ~0.1M for OEMs 0.3 1.8 ~0.4M employees in Italy, whereof ~0.2M for supplier and ~0.1M for maintenance & repair … whereof, ~850K jobs are at OEMs and Tier 1. Remaining 1M jobs are in additional affected industries including maintenance of vehicle, equipment & ~0.4M employees in Poland, whereof ~0.3M for supplier machinery for manufacturing, and Tier 2/3-supplier and ~0.1M for maintenance & repair

Germany UK France Italy Poland Spain Others ~0.3M employees in Spain, whereof ~0.2M for supplier and ~0.1M for maintenance & repair

Agenda

Industry sectors and job families primarily affected 1

Major trends influencing job development in Auto industry 2

Net impact of job development until 2030 3

Transition over time, across industries, job families, regions 4

Recommendations for companies and governments 5

12 Copyright by© 2021 Boston Consulting Group. All rights reserved. 2 Major trends influencing job development in Auto industry Spain & Poland preliminary Seven major trends are driving job changes in Europe Major trends Assumptions on development of trends

Retirement -2.1% -2.4% -2.4% -2.3% Retirement factor (p.a.)

Fluctuation -1.9% -1.4% -1.4% -1.4%

Fluctuation factor (p.a.) Overarching

Market Production Sales vol. Car parc -0.4% 0.9% 0.1% -1.8% -0.7% -1.5% -0.3% 0% 0.7% 0.5% 1.0% 1.1% volume volume (p.a.)1 (p.a.)1 (p.a.)1

Technology Demand for 11% 11% 11% 11% software engineers evolution (p.a.)

Car Content 1.0% 1.1% 1.9% 1.2% 0% 0% 0% 0% portfolio Product mix per car (p.a.) (p.a.)

Productivity 0.8% 1.6% 2.3% 1.0% Productivity (p.a.)

Industry specific Industry BEV vehicle High value-add Shift to EV 37% 39% 77% 46% production 100% 100% 100% 100% in battery (p.a.)1 production

Job Offshoring 0% -0.8% -1.4% -1.5% of jobs offshoring (p.a.)

Positive impact on job demand Negative impact on job demand No impact on job demand

1. 2019 as baseline year, Source: IHS Markit; BCG 13 Copyright by© 2021 Boston Consulting Group. All rights reserved. 2 Major Major trends Source: Company data; Stepstone; BCG Stepstone; data; Company Source: change industry to lead employments ended3.of 23% industry auto for proxy used industry auto 2. German OEMs European for proxy as used 1. Daimler [Employees in K] Retirementfactor Retirementmovement employeecausing andfluctuation 65 60 55 50 45 40 35 30 25 20 17 Age - – – – – – – – – – - 67 64 59 54 49 44 39 34 29 24 19 retirement factor of Affected numberAffected employees of leads a to total total employees) 1.2M influencing job development in industry Auto retired retired 384 employees employees until 2030( 2.1% 2.1% 287 321 (y - o - y) 256 until until 2030 499 553 20% 20% 588 592 620 of of 640 644 662 676 [Employees in K] factor Fluctuation employees) (~80% of industry Rest of employees) (~20% of OEM 1 OEMs (~0.6%) OEMs Fluctuation due industry to lower change for 2 Weighted fluctuationaverage factor (industry (industry change) Fluctuation 12.0% 4.6% than than Retirement 2.1% 2.1% rest (~2.2%) of industry is 1.9% 1.9% industry Same Same 7.6% 1.9% y - o - y industry Other 2.2% 0.6% 3 Fluctuation in other in Fluctuation Share of workforce Share industries y industries retiring y retiring 1.9% 2.1% Overarching trends Overarching y y - - o o - - y y - o - o - y - y 14

Copyright © 2021 by Boston Consulting Group. All rights reserved. 2 Major Major trends [in M cars] M [in production vehicle Forecast Source: IHS Market database; BCG database; IHS Market Source: Europe(<3,5t) in vehicle lightfor Forecast Note: Recoverydeclining sales 2030, volumeuntil of production 2019 17.7 '20, vehicle vehicle '20, production will (previously slight increase) After decline a of 2020 13.6 recover until 2030 influencing job development in industry Auto - - 3.9% 0.4% 2025 17.2 - 24%in 2030 17.1 [in M cars] M [in sales vehicle Forecast 2019 17.7 vehicle vehicle sales will recover until but not 2025 reach After dropa in 2020, the pre 2020 13.5 Legend: - - - COVID 7.7% 0.7% 2025 16.4 X.X % levels Year - over 2030 16.3 - year growth year [in M cars] M [in parc vehicle Forecast 2019 316 ~8%increase in carparc until with 2030slowing 2020 X.X 319 growth from 2025 % expected Growth from '19 to '30 to '19 from Growth +8.4% 0.7% 2025 333 2030 343 Productionincrease volume Sales volume decrease volume Sales Vehicle increase parc +0.7% - - 0.7% 0.4% y y y - - - o o o Market volume Market - - - y y y 15

Copyright © 2021 by Boston Consulting Group. All rights reserved. 2 Major Major trends Source: IHS Market database; BCG database; IHS Market Source: EV to due components vehicle in Change Technologymovement employee influence trends Labor Labor for demand BEVs and Power electronics Powertrain new/omitted components lead sector to 5 4 3 2 1 3 2 1 2 1 influencing job development in industry Auto High voltage wiring voltage High controller electronics Power converters & DC/AC DC/DC Gearbox system Cooling motor traction Electric pack battery Traction system exhaust & Fuel starter & Alternator engine combustion Internal (BEV (BEV ICE) vs redistribution (BEV (BEV ICE) vs ICEs Legend: is similar but x New component New x Technologydemand SW driving trends Omitted comp. Omitted New New rising technologies (mainly SW based) are becoming becoming crucial manage to SW perSW vehicle Key technology trends • • • Analog to digital migration digital to Analog increase Connectivity driving Assistant/Autonomous 2020 329 x Changed comp. Changed [in [in $] +11% 2025 615 for for auto X.X % 2030 900 Year industry industry - over - year growth year CAGR SW cost per vehicle vehicle per cost SW Labor demand Labor ICE vs. BEV vs. ICE – engineers Technology evolution Technology demand for SW for demand +11% 1:1 y - o - y 16

Copyright © 2021 by Boston Consulting Group. All rights reserved. 2 Major Major trends 100% Source: IHS Market database; Eurostat, BCG Eurostat, database; IHS Market Source: €50K. above segment car, premium per content€30K below segment EntryNote: mix Production continues Production: Trend car per content increasing of Productcar per content toincreased mixleads 20% 40% 60% 80% 0% Growing mid and premium segment premium and mid Growing ' 12 ' 16 influencing job development in industry Auto ' 20 per per car ' 24 – ' 28 average growth of Entry Mid Premium leads increased to content average Averagecar percontent [K€] ~1.0% ~1.0% y 2012 43.1 2016 45.0 - o - 2018 46.9 y until until 2030 +1.0% 2025 52.3 2028 51.7 Legend: X.X % Vehicle Product Product portfolio forecast types vehicle of number Constant Engineering: types Year Stable Stable number vehicle of types in in 2030 development engineersdevelopment - over 2022 600 - year growth year – Stable 2026 606 0% demand demand of 2030 606 Content increase per car car per increase Content through product mix for mix product through demand due to stable stable to due demand Constant engineering engineering Constant vehicle types vehicle suppliers 0.0% 1.0% y y - - o o - - y y Product mix Product 17

Copyright © 2021 by Boston Consulting Group. All rights reserved. 2 Major trends influencing job development in Auto industry Backup Market volume Hours per unit within OEMs will nearly stay constant over next decade

Vehicle Category HPU Production split 2020 Production split 2030

Mini cars (A) 29 5% 1%

Small cars (B) 31 17% 15%

Medium cars (C) 32 21% 20%

Large cars (D) 39 11% 10%

Executive cars (E) 56 7% 8%

Luxury cars (F) 100 0% 0%

Vans (HVAN/MVAN) 41 1% 0%

Multi-purpose vehicle (MPV) 32 3% 1%

Pick-up (PUP) 43 0% 0%

Sport utility vehicle (SUV) 34 35% 45%

Average HPU 35.1 35.3

Source: IHS Market database; BCG 18 Copyright by© 2021 Boston Consulting Group. All rights reserved. 2 Major Major trends value in B€ in value Source: Eurostat; BCG Eurostat; Source: inflation for 1. Adjusted industries across productivity Same Productivityyear per ~0.8% improvesby Production Employees [K€ [K€ per employee] Productionper employee value increases ~1.5% per year Based on production value in M in 1 influencing job development in industry Auto 2011 1.02 514 521 2013 1.04 468 486 +1.5% productivity productivity 2015 1.08 599 554 Legend: 1 2017 1.12 630 562 X.X % Year - over - [Yearly increaseaverage between 2014 employee added per value Gross productivity specific Industry Fueling Fueling infrastructure (Operation&Maint.) Fueling infrastructure (Manf.&Service) Charging infrastructure (Operation&Maint.) Charging infrastructure (Manf.&Service) Maintenance and repair of motor vehicles Industrial service provider Equipment & machinery Recovery of sorted materials Shaping and processing of flat glass Manufacture of other pumps and compressors Manufacture of batteries and accumulators Manufacture of electric lighting equipment Manufacture of cooling and ventilation equipment Manufacture of bearings, gears, gearing and driving elements Manufacture of electric motors, generators and transformers Manufacture of computers and equipment peripheral Manufacture of rubber Manufacture of other parts and accessories for motor vehicles Manufacture of electrical and electronic equipment for motor vehicles Manufacture of bodies (coachwork) for motor vehicles Manufacture of motor vehicles Industry year growth year productivity productivity increases per year~0.8% Based on industry weighted average Relevant Relevant input for model tyres and tubes and - 2018] 1 1.2% 1.2% 4.7% 4.7% 0.0% 1.2% 0.0% 3.1% 1.2% 1.2% 4.7% 0.0% 1.2% 1.2% 0.0% 1.2% 0.5% 1.2% 0.0% 1.2% 1.2% (adjusted for inflation) for (adjusted Productivity increase Productivity 0.8% y - o - y Productivity 19

Copyright © 2021 by Boston Consulting Group. All rights reserved. 2 Major Major trends Source: IHS Markit database; BCG database; IHS Markit Source: plug= PHEV electric; Battery = BEV Engine; combustion InternalICE = Europe,Only Note: cars] M [in sales Vehicle cars] M [in production Vehicle 2030 untilEurope in to ~4% declines share productionICE influencing job development in industry Auto 2019 2019 17.7 17.7 2020 2020 78% 12% 77% 13% 5% 5% 5% 5% 2021 2021 2022 2022 Legend: 2023 2023 2024 2024 BEV 2025 2025 16.4 17.2 37% 34% 19% 28% 32% 12% 28% 9% PHEV 2026 2026 2027 2027 HEV - 2028 2028 17.3 in hybrid electric; HEV = (mild) hybridHEV (mild) = electric; hybrid in ICE 2029 2029 2030 2030 16.3 17.1 11% 32% 11% 46% 25% 11% 59% 4% BEV BEV and PHEV by 2030) Germany (i.e., ~14M regulations in with latest climate in order comply to based BCG forecast on figures based latest on Total volume forecast forecast gap and BCG sales based on splitproduction latest forecast based on Total volume IHS 1 , sales split IHS electric figures export export IHS 1 , Growth in BEV BEV in Growth BEV share in vehicle vehicle in share BEV production in 2030 in production production 37% 59% y - o - y Shift to EVto Shift vehicle vehicle 20

Copyright © 2021 by Boston Consulting Group. All rights reserved. 2 Major Major trends Source: EU Commission; BCG Commission; EU Source: forecasted manufacturing batteryin add High value TrendEurope in production towards "Towards 2030, weintend produce to 150GWh battery battery across several cells "VW a announced plan six battery for influencing job development in industry Auto gigafactories gigafactories in Europe" Europe" gigafactories in in Share Share jobs of Possible2030 until scenarios production production production based based in Battery Module Europe Cell Share Share of prod. prod. ~78% ~12% ~10% costs valueadd Low ~10% valueadd Medium ~22% Forecasted Forecasted valueadd High ~100% scenario scenario for for 2030 in battery production battery in High value High 100% Shift to EVto Shift - add 21

Industry sectors and job families primarily affected 1

Major trends influencing job development in Auto industry 2

Net impact of job development until 2030 3

Transition over time, across industries, job families, regions 4

Recommendations for companies and governments 5

Nearly flat development of total jobs until 2030

Jobs development depends on volume scenario [in k jobs] +17 IHS plus2

-36 Intermediate IHS3 249 -50 1 -88 Base IHS -69k job reduction based on market volume change in Europe from '20 to '30 65 581 -36 -231 -69 65k new jobs created based on technology evolution shift, driven by increased software in the OEMs car ICE-focused suppliers 249k new jobs created based on product mix Non-ICE driven by vehicle portfolio increase and linked suppliers complexity Core automotive automotive Core Maintenance & Repair 5,654 5,619 Equipment & Services -631 -231k job reduction based on increase in Energy productivity production

Energy infrastructure -50k jobs lost through shift to EV, -631k driven by Material Adjacent industries Adjacent recycling Market Techn. Product Productivity Shift to reduced efforts for OEMs and ICE-focused suppliers, Volume Evolution mix factor EV +581k also driven by battery mfg. & charging infr. 2020 Major industry trends 2030

1. Base IHS = Volume according to IHS 2. IHS plus = Volume according to IHS with constant volume for 2028+ 3. Intermediate IHS = average of "base IHS" and "IHS plus"

Volume development impacts job demand – 5 scenarios

Scenario Description Production 2030 Sales 2030 Net job impact

2030 volume remains 1 Constant volume 17.7M 17.7M +123k constant vs. 2019

Base HIS Latest IHS forecast with 2 16.8M 16.2M -88k (as of June 2021) drop in volume after 2028

Basis for report Average between scenario 3 Intermediate IHS 17.1M 16.3M -36k 2 and 4

Latest IHS forecast, 4 IHS plus adjusted to keep volume 17.3M 16.5M +17k constant after 2028

Bloomberg Uplift Uplifted production and sales 5 forecast based on more positive 18.2M 17.5M +201k (as of June 2021) outlook from Bloomberg

Decrease for core and increase for adjacent industries Total number of jobs in Job category2 Europe 2030 [in K] and Production/ relative change to 2020 Engineering Procurement Sales Other Total Industry cluster1 Service Ops. 2030 OEMs 146 22% 27 -18% 527 -31% 57 -12% 108 865 -20%

ICE-focused 62 -50% 13 -53% 236 -45% 17 -41% 58 385 -42% suppliers -5% Non-ICE 423 12% 86 8% 1,747 12% 89 -4% 179 2,524 10% suppliers

Core automotive automotive Core Maintenance 10 53 854 73 52 1,042 & Repair

Equipment 96 28 28% 254 7% 41 -12% 33 453 & Services

Energy 19 161% 2 78 128% 1 11 112 128% production 34% Energy 14 545% 9 96 507% 12 10 140 543% infrastructure

Material

Adjacent industries Adjacent 9 10 9% 57 12 31% 9 97 recycling

779 4% 228 2% 3,849 302 -4% 461 5,619 1. Based on 26 industries 2. Based on 31 jobs families

Source: EuroStat; BCG Higher job demand compared to 2020 Lower job demand compared to 2020 Nearly constant job demand compared to 2020 25 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 Industry cluster Major movements within suppliers, OEMs slightly down

-219k OEM job reduction based on labor hours reduction per vehicle Impact on jobs in Europe [in k] -281k supplier job reduction driven by reduced ICE components, e.g. gears, pumps -36 119 7

238k new supplier jobs created, esp. in 63 battery manufacturing and electrical motors

14 24 maintenance & repair job increase -219 238 24k driven by aging car parc

5,654 14k equipment & services job increase, 5,619 driven by equipment and machinery sector

63k new energy production jobs created in -281 operations and maintenance for renewable energy

119k new infrastructure jobs created linked OEMs ICE-focused Non-ICE Maint. Equipm.& Energy Energy Material to service & operations of charging infrastructure supp. supp. & Repair Services prod. infra. recycling 2020 Affected industries 2030 7k new material recycling jobs created in new battery recycling plants

Source: BCG 26 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact industry clusters industry 7 the across Deep dives of job job of development until 2030 OEMs Material recycling Material Fuel/ Repair& Maintenance & Services Equipment Non ICE - - focused Suppliersfocused ICE Suppliers ICE Charg . Infrastructure . 27

Impact on jobs in Europe [in k] 4 29

-35k jobs lost based on a decreased production volume in Europe from '20 to 30' -35 -219 -51 29k additional jobs driven by the increased software technology in the car

1,084 4k job increase explained by the rising vehicle -166 portfolio and the linked vehicle complexity

-51k job reduction based on overall increase in productivity and efficiency 865

Market Techn. Product Productivity Shift to -166k jobs lost through shift to EV driven by reduced Volume Evolution mix factor EV labor hours in engine production 2020 Major industry trends 2030

Source: BCG 28 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 OEMs Productivity: OEM reduction programs target 6% of jobs within next few years

OEM Scope Timeframe Workers Announced reduction Announced increase Net-reduction

Ingolstadt & Neckarsulm 2020 - 2025 61,000 9,500 2,000 12.3%

Global 2020 - 126,000 6,000 - 4.8%

Global 2020 - 300,000 15,000 - 5.0%

Stuttgart 2020 - 2025 19,000 4,000 - 21.1%

Berlin 2020 - 2025 2,500 1,000 - 40.0%

EU 2019 - 2020 53,000 11,000 - 20.8%

Global 2020 - 2022 180,000 15,000 - 8.3%

EU 2020 - 417,000 20,000 10,000 2.4%

GER 2021 - 2023 120,000 4,000 - 3.3%

1,137,000 70,900 12,000 5.7%

Note: Number not to be directly linked to study results as multiple effects and longer timeframe have been considered.

Source: Press announcements; BCG 29 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 OEMs Powertrain & power electronics main differentiators between BEV and ICE

Internal combustion engine Battery electric vehicle (BEV) vehicle (ICEV) Powertrain 1 Internal combustion engine 2 Alternator & starter 3 3 Fuel & exhaust system 1 Traction battery pack 1 2 Electric traction motor 1 2 1 Cooling system 1 2 Gearbox 3 2 4 2 2 5 1 (Power) electronics 3 DC/DC & DC/AC converters 4 Power electronics controller 5 High voltage wiring

Legend: x New component/system in BEV vs ICEV x Omitted component/system in BEV vs ICEV x Changed component/system 1. Changes in case of native BEV or xEV platform; not applicable in case of mixed ICEV/BEV platform

Vehicle assembly & final inspection of automotive OEM (BEV only)

Front Logistics Battery Rear module Logistics module Logistics Front end Door Pre-assembly Pre-assembly Chassis assembly Pre-assembly line

Trim Marriage Final assembly Final inspection

Trim line Chassis assembly Final assembly Final inspection • Fuel piping • Exhaust system • Fuel, oil, coolant filling • Exhaust extraction system • Front trunk assembly • Propeller shaft • HV module joining • Engine performance test system • Secondary aggregates (air • Fuel tank • Battery pre-charging • Motor performance test cond. pump, PTC heater) • Gearbox system • Engine Marriage line • Motor + inverter •! Higher load on • Battery module conveyor system • Control module1 • High voltage cables • Charging unit • Cooling tubes connect

1. Control module mostly integrated in battery

Source: BCG 31 Copyright by© 2021 Boston Consulting Group. All rights reserved. Legend: New component/system in BEV vs ICEV Omitted component/system in BEV vs ICEV ! Changed component/system 3 Net impact of job development until 2030 OEMs Shift to EV: OEM labor requirements for BEVs and ICEVs decrease by 4pp

Labor hours per vehicle as a share of ICEV (%)

Cell manufacturing Module assembly Pack assembly Engine/motor Total labor hours 1 OEM scope manufacturing per vehicle as a 0 8 0 1 0 1 7 2 share of ICEV (%) ICEV BEV ICEV BEV ICEV BEV ICEV BEV

Battery cell Battery module Battery pack manufacturing assembly assembly -4%.

Component Engine/motor Engine machining Engine assembly Chassis Vehicle assembly manufacturing manufacturing Electric motor assembly assembly 54% 47% 46% Other component Press Body Paint Trim Marriage Final Final 42% ICEV BEV manufacturing shop shop shop line line assembly inspection Door assembly

ICEV BEV Press shop Body shop Paint shop Vehicle assembly

19 20 Number not to be 6 6 9 9 5 5 directly linked to study results as multiple ICEV BEV ICEV BEV ICEV BEV ICEV BEV effects have been considered. Shift from ICEV to BEV: Omitted process New process Changed process No/negligible change in process

1. Engine/motor manufacturing including transmission assembly Note: The reference vehicle for this analysis is a D-segment premium passenger car with one electric motor and an advanced driver-assistance system.

Marriage is the joining of body sections, chassis, and powertrain 32 Copyright by© 2021 Boston Consulting Group. All rights reserved. Source: BCG 3 Net impact of job development until 2030 OEMs Technology Evolution: Emerging job categories like software engineers

Software content in car increases… … and OEMs react with SW engineer recruiting – example VW

Estimated SW cost per vehicle [in $] Volkswagen OS

Supplier Module 1 Module 2 Module 3 Module 4 Module 5 900 5-10K OEM Volkswagen Connect- Intelligent Automated Vehicle Mobility +11% FTE Car.Software ivity body and driving & energy service/ unit cockpit perform. platform 615 FTEs ~200 ~150 ~1502 N/A3 N/A3 65-75% today Software engineers FTEs >800 >1,200 >1,800 >500 >500 in Volkswagen's by 20251 329 80-85% Investment Car.Software unit Medium High Very High Lower Lower by 2025 focus 90-95% FTEs FTEs by 25-35% Module Core services and infrastructure today: 2025: 15-20% 6 (enabler software across modules) 5-10% ~80 >200 2020 2025 2030

1. Including human resources from close software partnerships 2. Driver assistant teams (e.g., lane assist, cruise control) not yet integrated 3. Not part of the car

Source: Industry reports; Company announcements; Expert interviews; BCG 33 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 ICE-focused Suppliers ICE-focused suppliers with significant negative impact

Impact on jobs in Europe [in k] 47

-25k jobs lost based on a decreased production volume in Europe from '20 to 30' -29

Insignificant impact of new technologies developments -25 -281 for ICE-focused components

47k job increase explained by rising vehicle complexity 666 -274

-29k job reduction based on overall increase in productivity and efficiency

385 -274k major jobs lost through shift to EV driven by Market Techn. Product Productivity Shift to reduced number of components Volume Evolution mix factor EV 2020 Major industry trends 2030

Source: BCG 34 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 ICE-focused Suppliers Shift to EV: Component labor requirements for BEVs and ICEVs decrease by 7pp

Labor hours per vehicle as a share of ICEV (%)

Cell manufacturing Module assembly Pack assembly Engine/motor Total labor hours manufacturing1 Component tier scope per vehicle as a 0 8 0 1 0 1 7 2 share of ICEV (%) ICEV BEV ICEV BEV ICEV BEV ICEV BEV

Battery cell Battery module Battery pack manufacturing assembly assembly –7%.

Component Engine/motor Engine machining Engine assembly Chassis Vehicle assembly manufacturing manufacturing Electric motor assembly assembly 54% 47% Press Body Paint Trim Marriage Final Final 54% Other component 47% ICEV BEV manufacturing shop shop shop line line assembly inspection Door assembly

ICEV BEV Press shop Body shop Paint shop Vehicle assembly

Marriage is the joining of body sections, chassis, and powertrain. 35 Copyright by© 2021 Boston Consulting Group. All rights reserved. Source: BCG 3 Net impact of job development until 2030 Non-ICE Suppliers Non-ICE suppliers with positive impact

Impact on jobs in Europe [in k] 237

-76k jobs lost based on a decreased production volume 173 in Europe from '20 to 30' +238 36k additional jobs mainly driven by electrical & electronics software extents

36 -132 2,524 173k job increase explained by the rising vehicle portfolio and the linked vehicle complexity -76

2,286 -132k job reduction based on overall increase in productivity and efficiency

237k major job increase driven by battery Market Techn. Product Productivity Shift to manufacture and electric motors Volume Evolution mix factor EV 2020 Major industry trends 2030

Source: BCG 36 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 Non-ICE Suppliers Shift to EV: Battery tier labor requirements for BEVs and ICEVs increase by 8%

Labor hours per vehicle as a share of ICEV (%)

Cell manufacturing Module assembly Pack assembly Engine/motor Total labor hours manufacturing1 Battery tier scope per vehicle as a 0 8 0 1 0 1 7 2 share of ICEV (%) ICEV BEV ICEV BEV ICEV BEV ICEV BEV Share expected to decrease over next years due to economies of scale. Battery cell Battery module Battery pack manufacturing assembly assembly

Component Engine/motor Engine machining Engine assembly Chassis Vehicle assembly manufacturing manufacturing Electric motor assembly assembly 54% 47% Other component Press Body Paint Trim Marriage Final Final +8% 8% ICEV BEV manufacturing shop shop shop line line assembly inspection Door assembly 0% Press shop Body shop Paint shop Vehicle assembly ICEV BEV

Marriage is the joining of body sections, chassis, and powertrain. 37 Copyright by© 2021 Boston Consulting Group. All rights reserved. Source: BCG 3 Net impact of job development until 2030 Non-ICE Suppliers Shift to EV: Cell production can create up to 60K jobs in Europe till 2030

Battery cell production (started & planned plants by 2030)

UK 43 GWh Norway 75 GWh Plant site OEM Size (GWh) Plant site OEM Size (GWh) Coventry AMTE ~5 Mo i Rana Freyr 43 740 Sunderland AESC 3 Agder Morrow 32 GWh Blyth Britishvolt 35 concretely planned Sweden Germany 291 GWh 40 GWh until 2030 Plant site OEM Size (GWh) Plant site OEM Size (GWh) Skelleftea/Ett Northvolt-VW 40 Erfurt CATL 100 Grünheide Tesla 100 Saarland Svolt 24 Poland 70 GWh Salzgitter Northvolt-VW Group 24 Plant site OEM Size (GWh) Kaiserslautern ACC (PSA/SAFT) 24 280 Anhalt Farasis 10 Wroclaw LG Chem 70 GWh Brandenburg Microvast 6 additionally Dresden Leclanche 3 Slovakia 10 GWh announced Plant site OEM Size (GWh) until 2030 France 74 GWh Košice Inobat 10 Plant site OEM Size (GWh) Dourvin Acc (Total/PSA) 24 Rodez Verkor 16 (50) Hungary 88 GWh Plant site OEM Size (GWh) Italy 48 GWh Latest announcements Göd Samsung 40 Up Plant site OEM Size (GWh) VW plans 4 additional Northvolt plans 150 Komárom SKI 8 gigafactories ~190GWh GWh (add. ~90GWh) Teverola FAAM 3 Komárom 2 SKI 10 in Spain, Germany and mfg. capacity in to 60k Scarmagno Italvolt/Manganese 45 Eastern Europe Europe by 2030 Iváncsa SKI 30 employees by 20301 1. Direct and indirect employees within cell manufacturing based on published battery plant projects and #employees/GWh production Note: Existing and planned battery cell production

Source: Press search; OEM announcements; BCG 38 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 Equipment & Services Equipment & Services stable until 2030

Impact on jobs in Europe [in k] 13 26 -15k jobs lost based on a decreased production volume +14 in Europe from '20 to 30'

-10 Insignificant impact of new technologies developments for equipment and services

-15 453 26k job increase explained by the rising vehicle complexity 439

-10k job reduction based on overall increase in productivity and efficiency

13k job increase driven by equipment demands for Market Techn. Product Productivity Shift to battery manufacturing and electric motor factories Volume Evolution mix factor EV 2020 Major industry trends 2030

Source: BCG 39 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 Equipment & Services Shift to EV: Limited impact on demand for equipment and services sector

Total labor requirements for Automotive automation level already high, BEVs and ICEVs are comparable remaining barriers similar for BEVs and ICEVs

Total labor hours per vehicle Average automation level in as a share of ICEV (%) automotive production (%) 80%+ 95%+ 90%+ 20% –1 Press shop Body shop Paint shop Assembly • Press shop, body shop and paint shop already with very high automation levels and limited potential for further advancements

100% 99% • Assembly process still mainly manual

• Recent trials to further push assembly automation (e.g., Tesla) have all failed due to very low reliability of automated processes

• Progress in upcoming years expected, but automation ICEV BEV barriers in assembly (e.g., flexible components) similar between BEVs and ICEVs

Note: The reference vehicle for this analysis is a D-segment premium passenger car with one electric motor and an advanced driver-assistance system. Marriage is the joining of body sections, chassis, and powertrain.

Source: BCG 40 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 Equipment & Services Shift to EV: Total labor requirements for BEVs and ICEVs are similar

Labor hours per vehicle as a share of ICEV (%)

Cell manufacturing Module assembly Pack assembly Total labor hours Engine/motor per vehicle as a 0 8 0 1 0 1 manufacturing1 share of ICEV (%) ICEV BEV ICEV BEV ICEV BEV 7 2 ICEV BEV Battery cell Battery module Battery pack –1 manufacturing assembly assembly

Component Engine/motor Engine machining Engine assembly Chassis Vehicle assembly manufacturing manufacturing Electric motor assembly assembly 54% 47% Other component Press Body Paint Trim Marriage Final Final 100% 99% ICEV BEV manufacturing shop shop shop line line assembly inspection Door assembly

ICEV BEV Press shop Body shop Paint shop Vehicle assembly

Marriage is the joining of body sections, chassis, and powertrain. 41 Copyright by© 2021 Boston Consulting Group. All rights reserved. Source: BCG 3 Net impact of job development until 2030 Maintenance & Repair Maintenance & Repair with slight positive impact

Impact on jobs in Europe [in k]

85 85k new jobs created based on an increased car parc in Europe until 2030

Insignificant impact of new technologies developments for maintenance & repair -61 +24 Insignificant impact by the product mix explained by the small share of new cars in the overall car parc

1,042 Insignificant impact by the productivity explained by very limited historic productivity gains

1,019 -61k jobs lost through shift to EV driven by reduced Market Techn. Product Productivity Shift to labor hours in battery vehicle maintenance and repair Volume Evolution mix factor EV 2020 Major industry trends 2030

Source: BCG 42 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 Maintenance & Repair Shift to EV: Decline in repair shop employees by increased e-mobility

Area of focus for Key Takeaways: Maintenance & Repair ICEV PHEV HEV BEV

Oil change Cooling liquids Propulsion type Sparking plugs determines the Air filter change average effort per vehicle

Toothed belt Maintenance BCG – European Fuel filters Reduce break wear Break fluid down crucial for aftermarket report diff. between ICE & Power electronics HEV/PHEV Battery cooling Brake pad BEV with reduced and changed scope Exhaust system compared to ICE

Repair Clutch Numbers not to be Average effort per directly linked to study -6% -10% -15% results as multiple vehicle compared to ICEV 100% (~94%) (~90%) (~85%) effects have been considered. Existent Less complex/wear down Non-Existent

Impact on jobs in Europe [in k]

63 Minimal impact by overall market volume development - shift between propulsion systems is the main driver

Technology evolution in the car with no impact on energy +63 production

Product mix (content per car) has no impact on energy 112 production

Minor job reduction based on productivity

49 63k job increase by shift to EV due to rising demand of Market Techn. Product Productivity Shift to clean energy for BEVs Volume Evolution mix factor EV 2020 Major industry trends 2030

Source: BCG 44 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact Source: BCG Source: cars] [M parc car ICE effects three by consumptiondriven fuel in Decrease [1000 km] [1000 / car year per distance travelling Average [l/100km] consumption Averagefuel of job job of development until 2030 remainderleads to job a 2008 2020 17.96 6.19 2010 315 ~43% of ~43%capacity can be shifted towards other products, 2009 2021 5.92 314 16.55 2011 2010 2022 5.72 312 Legend: 16.64 2012 2011 2023 5.56 308 X.X 16.40 2013 decrease perof 2.6% year % Year 2012 2024 5.43 303 16.59 - 2014 over - - - - 2013 2025 year growth year 5.25 0.5% 2.1% 2.0% 297 16.34 2015 2014 2026 5.13 290 Backup 16.97 2016 2015 2027 5.00 283 (CAGR) 17.26 2017 2016 2028 4.94 274 18.21 2018 2017 2029 4.96 266 17.15 2019 2018 2030 5.02 258 Decrease in ICE related related ICE in Decrease employment in Energy Energy in employment production 2.6% Energy production Energy y - o - y 45

Copyright © 2021 by Boston Consulting Group. All rights reserved. 3 Net impact Source: BCG Source: Maintenance & 1. Operations M] [in O&M for Employment [TW] capacity Energy RenewableO&M stronglyincreases switch energy Hydro RunHydro coal HardFossil Nuclear of job job of development until 2030 1 Conventional energyConventional - of - river and poundage and river 2020 2020 0.34 1.02 2021 2021 0.35 1.04 2022 2022 0.36 1.06 Other Oil Fossil Gas Fossil 2023 2023 0.37 1.13 Legend: 2024 2024 0.39 1.15 Solar Offshore Wind Onshore Wind X.X Renewableenergy +3.2% +2.4% % 2025 2025 0.39 1.15 Year - 2026 2026 0.41 1.17 over - year growth year Batteries Biomass 2027 2027 0.42 1.20 2028 2028 0.44 1.23 Backup 2029 2029 0.45 1.26 2030 2030 0.47 1.29 1 jobs Biomass wind, solar and for on O&M Huge increase in capacity renewable in share of Steady increase employment employment - /offshore /offshore energy production energy Increase in total in Increase Increase in Increase employment for employment energy capacity energy 3.2% 2.4% Energy production Energy y y - - o o - - y y O&M 46

Copyright © 2021 by Boston Consulting Group. All rights reserved. 3 Net impact Source: BCG Source: Maintenance & 1. Operations [K] energy EV for employment O&M grow massively will jobsproduction EVenergy 1 of job job of development until 2030 2020 0.68 2021 0.75 2022 1.39 employment Based on shareof energy consumption for 2023 2.32 Legend: 2024 3.51 increases 41% per year +41.0% X.X 2025 4.95 % Year 2026 6.88 - over - year growth year 2027 9.35 12.41 2028 (CAGR) Backup EVs 16.16 2029 , 21.19 2030 production jobs production EV related energy Massive growth of employment in Energy Energy in employment Increase in EV related related EV in Increase production 41% Energy production Energy y - o - y 47

Impact on jobs in Europe [in k]

118 Minimal impact by overall market volume development - shift between propulsion systems is the main driver

Technology evolution in the car with no impact on energy infrastructure +119 Product mix (content per car) has no impact on energy 140 infrastructure

Small job reduction based on productivity in fuel infrastructure

22 118k job increase by shift to EV due to rising charging Market Techn. Product Productivity Shift to infrastructure need for BEV Volume Evolution mix factor EV 2020 Major industry trends 2030

Source: BCG 48 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 Energy infrastructure Shift to EV: Charging infrastructure strongly replaces fuel until 2030

Fuel infrastructure in Europe Charging infrastructure in Europe

ICEV/HEV car parc [in M] Petrol stations [in K]1 BEV/PHEV car parc [in M] Electric charging points [in K]2

-0.6 % -0.5 % +44.5 % 318 318 299 125 122 119 +42.1 % 43 29,462 15 9,010 1 744 2020 2025 2030 2020 2025 2030 2020 2025 2030 2020 2025 2030

Total number of petrol stations slowly decreases by Total public and private charging points strongly ~0.5% y-o-y following total ICEV car parc trend. increases in Europe driven by public investments in cities/hubs and subsidies for private setups

Jobs related to fuel infrastructure in Jobs in charging manufacturing and maintenance are manufacturing & maintenance are expected to therefore expected to reach ~155k in 2030 from ~7k in decrease proportionally by ~0.5% y-o-y. 2020, with a 37% y-o-y increase

1. Yearly reduction of 0.5% of in petrol stations due to network consolidation 2. included public fast & normal (<22kW) as well as private charging points

Source: European Alternative Fuels Observatory; MWV – Mineralölwirtschaftsverband e.V. 49 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 Energy infrastructure Shift to EV: Charging infrastructure jobs will grow by up 38% YoY until 2030

Fast growing charging Charging infrastructure companies need to set up a wide- infrastructure forecasted [in M] ranging EV charging ecosystem

Public - fast (>22kw) Public - regular (<22kw) 23.6 Private - Residential/work 0.4

+44% 2.5 Manuf. of Services Installation and Operations and charging stations and software maintenance Support

Charging infrast. (Manf. & Service) Charging infrast. (Instal & Ops.) 7.2 employment [in K] employment [in K] 0.2 42 57 1.1 +25% +38% 20.7

0.6 0.03 0.2 5.9 5 0.4 2 2020 2025 2030 2020 2030 2020 2030

Impact on jobs in Europe [in k]

20 -5k slight decrease in jobs based on reduced number of sold cars in Europe until 2030 +7

Insignificant impact of new technologies developments -5 for material recycling

-8 Product mix (content per car) has no impact on charging 97 infrastructure 90

-8k job reduction based on increase in productivity

20k significant job increase by shift to EV due to rising Market Techn. Product Productivity Shift to charging infrastructure need for BEV Volume Evolution mix factor EV 2020 Major industry trends 2030

Source: BCG 51 Copyright by© 2021 Boston Consulting Group. All rights reserved. 3 Net impact of job development until 2030 Material Recycling Shift to EV: Battery recycling becoming mandatory for producers in EU & China

Europe China USA Ambitious plans to become global Passed significant reforms in 2017 Subsidized Lithium-ion battery leader in sustainable battery making EV manufacturer recycling production responsible for battery recycling No EV battery recycling EU introduced 'The Battery Manufacturers responsible for regulation on federal level – few Directive', making producer of recovery of EV-batteries and set states passed regulations batteries responsible for up of recycling channels USA is attempting to pass financing costs of collection and Battery makers are encouraged to regulation on battery recycling; recycling at end-of-life of battery adopt standardized and easily currently conducting research No regulation dealing explicitly dismantled product designs, to with Lithium-ion batteries yet help automate recycling process

Source: Johnson Matthey Technology; Reuters; Clean technologies and environmental policies; BCG 52 Copyright by© 2021 Boston Consulting Group. All rights reserved. 4 Shifts &replacementsShifts families 4jobthe across Deep dives in in industry and sectors job families Sales Ops ProductionService / Procurement Engineering 53

Copyright © 2021 by Boston Consulting Group. All rights reserved. 4 Shifts & replacements in industry sectors and job families Engineering Strong engineering demand for non-ice suppliers and charging infrastructure

Total of job alteration in Europe [in k] 27k OEM job increase based on 24 development of new BEV vehicles 27

-62k supplier job reduction driven by +31 44 reduced number of ICE components

44k new supplier jobs created due to need for development of new BEV components

Stable demand within maintenance & repair 779 -62 748 Stable demand within equipment & services

24k new infrastructure jobs created due to massive increase in planned installations OEMs ICE-focused Non-ICE Maint. Equipm.& Fuel/charging Material supp. supp. & Repair Services Infrastr. recycling Stable demand within material recycling 2020 Industry cluster 2030

Source: BCG 54 Copyright by© 2021 Boston Consulting Group. All rights reserved. 4 Shifts & replacements in industry sectors and job families Procurement New procurement jobs for infrastructure, switch within ICE and BEV suppliers

Total of job alteration in Europe [in k] -6k slight OEM job reduction 9 +4 -15k supplier job reduction driven by reduced demand for ICE components 6 -6 6k new supplier jobs created driven by increased demand for BEV components 6

Stable demand within maintenance & repair 228 225 -15 6k slight demand increase within equipment & services

9k new infrastructure jobs created linked to procurement of charging infrastructure OEMs ICE-focused Non-ICE Maint. Equipm.& Fuel/charging Material supp. supp. & Repair Services Infrastr. recycling Stable demand within material recycling 2020 Industry cluster 2030

Source: BCG 55 Copyright by© 2021 Boston Consulting Group. All rights reserved. 4 Shifts & replacements in industry sectors and job families Production /Service Ops Strong reduction for production/service ops within OEMs and ICE suppliers

Total of job alteration in Europe [in k] -232k OEM job reduction based on increased labor productivity

-68 124 -191k supplier job reduction driven by reduced demand for ICE components

193 193k new supplier jobs created driven by -232 increased demand for BEV components

Stable demand within maintenance & repair 3,917 3,849 -191 Stable demand within equipment & services

124k new infrastructure jobs created based on massive increase in planned installations OEMs ICE-focused Non-ICE Maint. Equipm.& Fuel/charging Material supp. supp. & Repair Services Infrastr. recycling Stable demand within material recycling 2020 Industry cluster 2030

Source: BCG 56 Copyright by© 2021 Boston Consulting Group. All rights reserved. 4 Shifts & replacements in industry sectors and job families Sales Decline in sales jobs for OEMs and ICE-focused suppliers

Total of job alteration in Europe [in k] -8k OEM job reduction based on shift towards online sales channels

-12k ICE-focused supplier job reduction -14 driven by reduced demand for ICE components -8

sales jobs within non-ice suppliers due 10 -4k to shift towards online sales

-12 Stable demand within maintenance & repair 316 -4 -6 302 -6k sales jobs within equipment & services due to shift towards online sales

10k new infrastructure jobs created based on massive increase in planned installations OEMs ICE-focused Non-ICE Maint. Equipm.& Fuel/charging Material supp. supp. & Repair Services Infrastr. recycling Stable demand within material recycling 2020 Industry cluster 2030

Industry sectors and job families primarily affected 1

Major trends influencing job development in Auto industry 2

Net impact of job development until 2030 3

Transition over time, across industries, job families, regions 4

Recommendations for companies and governments 5

Transition of 2 Transition between ~0.8M jobs to be shifted to & from industry clusters job positions industries & job families in 3 perspectives in Auto & adjacent industries

3 Transition Job growth in Germany expected, slight decline in across regions rest of Europe

Total of job development 2010 - 2030 in Europe [in k] Key characteristics 2020-30

Pre-COVID level reached '24 and exceeded after '29

Governmental programs No return to previous growth 5.7 5.7 5.6 5.6 5.6 5.7 trajectory until 2030 5.4 5.4 5.5 5.5 5.4 5.4 5.5 5.2 5.2 5.0 5.1 4.8 4.9 4.9 4.7 Recovery from COVID setback COVID Consolidation expected until ~2023 setback phase

Consolidation phase 2025-27 due to total volume decline

’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23 ’24 ’25 ’26 ’27 ’28 ’29 ’30

Source: BCG 60 Copyright by© 2021 Boston Consulting Group. All rights reserved. 4 Shifts & replacements in industry sectors and job families Transition between 2 industries & job families 1.6M trainings, plus 0.8M transitions with varying effort

Staying Small transition Large transition Industry exit

Industry same industry cluster similar industry cluster other industries No transition Job family same job family same / similar job family same / similar job family

Medium effort, re- Low effort, minor High effort, Transition qualify- No effort re-qualification intense re- cation & incentives effort needed qualification & needed support needed

1st choice transition – 2nd choice transition – 3rd choice transition – Prepare employees for as many jobs only if shift only if shift Priority 0 future job demands 1 2 3 shifted within industry within industry not in Auto/adj. Industry through training as possible possible not possible

with major Affected ~1,600K retraining ~264K ~346K ~225K ~4,800K with no/minor Positions ~3,200K retraining

Focus of this chapter

Source: BCG 61 Copyright by© 2021 Boston Consulting Group. All rights reserved. 4 Shifts & replacements in industry sectors and job families Transition between 2 industries & job families ~835k total job shifts between industry clusters

Job category Jobs [k] Job transitions [k] Jobs [k] Job category 25 26 748 779 Deep Engineering Engineering Dive 20 51

51 20 13 14 225 233 Deep Procurement Procurement Dive 8

8 0 210

Production/ 3,917 293 3,849 Production/ Deep Dive Service Ops. 90 22 Service Ops.

20 90 16 13 316 302 Deep Sales Sales Dive 14

0 14 449 4 16 461 Other 16 4 Other Total Auto Total Auto ~5.7M 264 + 346 + 128 + 97 = 835 ~5.6M & adj. industries out in & adj. industries

62 Copyright by© 2021 Boston Consulting Group. All rights reserved. Transition within same industry cluster Transition in between Auto or adjacent industry Transition to/from other industries 4 Shifts & replacements in industry sectors and job families Transition between 2 industries & job families Jobs transition mainly from OEM and ICE-focus suppliers to other clusters

Job category Industry cluster Jobs [k] Job transitions [k] Jobs [k] Industry cluster Job category OEMs 119 146 OEMs ICE-focused suppliers 123 62 ICE-focused suppliers Non-ICE suppliers 380 423 Non-ICE suppliers Equipment & Services 97 96 Equipment & Services Deep Engineering Energy production 7 19 Energy production Engineering Energy infrastructure 2 14 Energy infrastructure Dive Maintenance & Repair 10 10 Maintenance & Repair Material recycling 9 9 Material recycling Other industries 51 20 Other industries OEMs 33 27 OEMs ICE-focused suppliers 28 13 ICE-focused suppliers Non-ICE suppliers 80 86 Non-ICE suppliers Equipment & Services 22 28 Equipment & Services Deep Procurement Energy production 1 2 Energy production Procurement Energy infrastructure 1 9 Energy infrastructure Dive Maintenance & Repair 51 53 Maintenance & Repair Material recycling 9 10 Material recycling Other industries 8 0 Other industries OEMs 759 527 OEMs ICE-focused suppliers 427 236 ICE-focused suppliers Non-ICE suppliers 1,554 1,747 Non-ICE suppliers Production/ Equipment & Services 238 254 Equipment & Services Production/ Deep Energy production 34 78 Energy production Service Ops. Energy infrastructure 16 96 Energy infrastructure Service Ops. Dive Maintenance & Repair 835 854 Maintenance & Repair Material recycling 54 57 Material recycling Other industries 20 90 Other industries OEMs 173 57 OEMs ICE-focused suppliers 87 17 ICE-focused suppliers Non-ICE suppliers 272 89 Non-ICE suppliers Equipment & Services 82 41 Equipment & Services Deep Sales Energy production 6 1 Energy production Sales Energy infrastructure 3 12 Energy infrastructure Dive Maintenance & Repair 122 73 Maintenance & Repair Material recycling 18 12 Material recycling Other / outside 0 14 Other industries Total other 449 461 Total other Other Other industries 16 4 Other industries Other Total Auto & adj. industries ~5.7M ~5.6M Total Auto & adj. industries

Highest demand increase in non-ICE production staff

Top 10 job families Bottom 10 job families highest demand increase highest demand decrease

Industry Industry cluster Industry Job family Change cluster Industry Job family Change

Manufacture of batteries and Operational Operational Non-ice 79,733 OEM Manufacture of motor vehicles -154,612 accumulators (production) staff (production) staff Manufacture of electric motors, Operational Manufacture of other parts and Operational Non-ice 64,477 Non-ice -79,805 generators and transformers (production) staff accessories for motor vehicles (production) staff Manufacture of electrical and electronic Operational Manufacture of cooling and ventilation Operational Non-ice 30,790 ICE-focused -51,133 equipment for motor vehicles (production) staff equipment (production) staff Software/system Manufacture of bearings, gears, gearing Operational OEM Manufacture of motor vehicles 28,440 ICE-focused -50,443 developer and driving elements (production) staff Manufacture of batteries and Operational Operational Non-ice 27,600 OEM Manufacture of motor vehicles -42,612 accumulators (logistics) staff (logistics) staff Energy Charging infrastructure Operational Manufacture of other parts and Operational 23,523 Non-ice -27,625 infrastructure (Operation&Maint.) (production) staff accessories for motor vehicles (logistics) staff Manufacture of electric motors, Operational Manufacture of other pumps and Operational Non-ice 22,319 ICE-focused -18,941 generators and transformers (logistics) staff compressors (production) staff Energy Operational Manufacture of bearings, gears, gearing Operational Charging infrastructure (Manf.&Service) 18,487 ICE-focused -13,599 infrastructure (production) staff and driving elements (logistics) staff Equipment Operational Manufacture of cooling and ventilation Operational Equipment & machinery 18,403 ICE-focused -13,289 & Services (production) staff equipment (logistics) staff Manufacture of electrical and electronic Software/system Non-ice 17,164 OEM Manufacture of motor vehicles Machine operator -10,977 equipment for motor vehicles developer

64 Copyright by© 2021 Boston Consulting Group. All rights reserved. 4 Shifts & replacements in industry sectors and job families Transition between 2 industries & job families Production: ~293k lost jobs shifted across industries

Production/Service Ops.

Transition of jobs in Production & Service Ops. [in k]

68k net job loss in Production/Service Ops. 3,917 3,849 90 22 -68 (2.3%) 210k lost jobs can be compensated by new jobs in the (0.6%) same industry cluster 293 293 (7.5%) (7.6%) 293k los jobs can be compensated by new jobs in other Auto and adjacent industries

210 210 90k lost jobs cannot be compensated within Auto or adjacent industries due to missing demand match (5.4%) (5.5%)

3,324 3,324 22k new jobs cannot be filled by transition from Auto or adjacent industries – compensation from outside needed (84.9%) (86.4%) Total job demand Total job demand decrease increase

65 Copyright by© 2021 Boston Consulting Group. All rights reserved. Transition within same industry cluster Transition in between Auto or adjacent industry Transition to/from other industries 4 Shifts & replacements in industry sectors and job families Transition between 2 industries & job families Engineering: ~51k addl. jobs to be compensated

Engineering

Transition of jobs in Engineering [in k] 779 31k net job increase in Engineering +31 51 748 (6.5%) 25k lost jobs can be compensated by new jobs in the 20 same industry cluster (2.7%) 26k los jobs can be compensated by new jobs in other 26 26 Auto and adjacent industries (3.5%) (3.3%) 20k lost jobs cannot be compensated within Auto or 25 (3.3%) 25 (3.2%) adjacent industries due to missing demand match

677 677 51k new jobs cannot be filled by transition from Auto or adjacent industries – compensation from outside needed (90.5%) (86.9%) Total job demand Total job demand decrease increase

66 Copyright by© 2021 Boston Consulting Group. All rights reserved. Transition within same industry cluster Transition in between Auto or adjacent industry Transition to/from other industries 4 Shifts & replacements in industry sectors and job families Transition between 2 industries & job families Procurement: ~8k of additional jobs to be compensated

Procurement

Transition of jobs in Procurement [in k]

233 8k net job increase in Procurement 8 +8 225 (3.4%) 13k lost jobs can be compensated by new jobs in the same industry cluster 14 14 (6.2%) (6.0%) 14k los jobs can be compensated by new jobs in other Auto and adjacent industries

No need to compensate lost jobs outside of Auto or 13 (5.8%) 13 (5.6%) adjacent industries due to missing demand match

198 198 8k new jobs cannot be filled by transition from Auto or adjacent industries – compensation from outside needed (88.0%) (85.0%) Total job demand Total job demand decrease increase

67 Copyright by© 2021 Boston Consulting Group. All rights reserved. Transition within same industry cluster Transition in between Auto or adjacent industry Transition to/from other industries 4 Shifts & replacements in industry sectors and job families Transition between 2 industries & job families Sales: ~14k of lost jobs to be compensated outside

Sales

Transition of jobs in Sales [in k]

316 14k net job loss in Sales

14 -14 (4.4%) 16k lost jobs can be compensated by new jobs in the 302 same industry cluster

13 13 13k los jobs can be compensated by new jobs in other (4.1%) (4.3%) Auto and adjacent industries

14k lost jobs cannot be compensated within Auto or 16 (5.1%) 16 (5.3%) adjacent industries due to missing demand match

273 273 No need to fill new jobs by transition from outside (86.4%) (90.4%) Total job demand Total job demand decrease increase

68 Copyright by© 2021 Boston Consulting Group. All rights reserved. Transition within same industry cluster Transition in between Auto or adjacent industry Transition to/from other industries 4 Shifts & replacements in industry sectors and job families Transition between 2 industries & job families 2.8M employees need to be hired overall

Impact on jobs in Europe [in k]

Demand driven Supply driven impact impact Demand driven impact 700 Transitions as shown -36k jobs lost in with on previous slides ~700k new & ~735k lost jobs 2,057 -735

-36 Supply driven impact Additional shifts -1,075 2.1M replacements needed to to be managed 5,654 5,619 compensate retirement/fluctuation

-982

Net-job loss Retirement Fluctuation Replacements ~2.8M employees need to be hired in 2020 2030 affected industries until 2030

Source: BCG 69 Copyright by© 2021 Boston Consulting Group. All rights reserved. 4 Shifts & replacements in industry sectors and job families Transition across regions 3 Results for Spain & Poland preliminary Germany with increase, Spain with high decrease

Limited transitions across European countries Regional distribution of jobs across Europe [in M] due to political & cultural barriers

Europe Germany

5.7 5.6 -36k 1.7 1.7 +25k (-1%) (+2%) Jobs in Jobs in 2030 vs. 2019 2030 vs. 2019 2019 2030 2019 2030

Spain Poland -35k -4k 0.3 0.3 0.4 0.4 (-10%) (-1%)

Jobs in 0.4 0.4 Jobs in 2030 vs. 2019 2030 vs. 2019 2019 2030 2019 2030

Industry sectors and job families primarily affected 1

Major trends influencing job development in Auto industry 2

Net impact of job development until 2030 3

Transition over time, across industries, job families, regions 4

Recommendations for companies and governments 5

71 Copyright by© 2021 Boston Consulting Group. All rights reserved. 5 Recommendations transition master the act now need NGOsto governments & Companies, for companies companies for and governments to ! Governments Companies & NGOs & evolutions and demands, demands, and evolutions status Analyze industry to maintain status as EU job motorjob EU as status maintain to industry automotive European of position leading globally Ensure accordingly seekers job train specifically and Tailor technologies new towards curricula educational transition the master to order Provideto incentives transition necessary and changes upcoming the about companies and sectors within awareness Create programs as restructuring well re Design operations as as well profiles and demands job on adjustments additional Determine Revisitmake a clean company a Design - sheet, "zero sheet, - qualification/upskilling programs and hiring as and hiring programs qualification/upskilling - or - quo with regards to future product product future to regards with quo - buy decisions (e.g., battery cell mfg.) cell battery (e.g., decisions buy - specific 2030 target picture based on based picture 2030 target specific - based" approach based" affected sectors and companies companies and sectors affected operations, operations, job profiles job in in 72

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