Company Vehicle Regulations Could Create 344,000 Jobs in Europe

A recently-proposed company-vehicle policy has the potential to create hundreds of thousands of new job opportunities across Europe at a time when the continent’s auto sector is facing a historic decline. According to the Fraunhofer ISI Study, company vehicles represent the fastest way for Europe to turn its ongoing transition to battery electric vehicles (BEVs) into an active job creator. 

For years anti-EV proponents argued that transitioning to electric cars would cause significant job losses in the auto industry. And with European auto giants struggling to compete with Chinese EVs in both price and quantity, the transition threatened to permanently eliminate countless jobs in one of Europe’s most prolific industries. 

However, the Transport & Environment-commissioned study, which examines the proposed Clean Corporate Vehicles Regulation, spotted a potential job creation opportunity for more than 300,000 Europeans. 

Under the proposed legislation, large companies would have to meet new national targets for low- and zero-emission vehicles starting from 2030. Since corporate buyers make up nearly 60% of Europe’s vehicle registrations, particularly in the passenger vehicle class, the proposed regulation could have a significant effect on the vehicles auto companies choose to produce. 

Fraunhofer notes that combining vehicle production requirements with limited financial incentives would yield the most potent industrial opportunities for European job-seekers. As such, giving corporations a concrete deadline for meeting zero emission vehicle targets while restricting financial support to qualifying European-made low- and zero-emission fleet vehicles could potentially create a whopping 344,000 full-time jobs across the entire European continent. 

Current proposals suggest limiting company-car financial support to qualifying low- and zero-emission cars manufactured in Europe. Key components and assembly requirements for these European-made vehicles would be defined by the Industrial Accelerator Act. 

Moderate predictions from the study put the rate of job creation at 196,000 additional positions by the year 2030 compared to stronger predictions that suggest 344,000 extra jobs by decade’s end. The stronger scenario also predicts a whopping $22.2 billion in additional annual value creation and $20 billion in additional investment from this year to 2030. 

A country-by-country breakdown of the data reveals that Poland and Germany will benefit the most from the employment gains. This could be a boon for Germany, which has historically been the seat of Europe’s auto segment but has stumbled in recent years amidst a sluggish transition to electric mobility, nigh-existential competition from cheaper Chinese electric cars, falling sales in massive auto markets like China, and rising energy and domestic manufacturing costs. 

American EV makers like Lucid Motors (NASDAQ: LCID) will be wondering whether policy makers in the country also simulate job-creation/loss scenarios while making policies that impact the auto industry of the U.S. If they did, their decisions could be different from their current ones. 

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