Fraunhofer Study: Combustion Engine Ban Threatens Nearly All Jobs in Austria's Auto Industry

Brussels Scenario with 90 Percent CO2 Reduction

According to the researchers, the only way to mitigate the high losses in value creation is to supplement the model currently under discussion with renewable fuels and CO2-reduced materials. The originally planned ban on new registrations of vehicles with combustion engines for 2035 had been somewhat weakened in the meantime; under current EU legislation, only battery-electric vehicles may be newly registered from then on.

Economics Minister Wolfgang Hattmannsdorfer (ÖVP) characterized the results as a political wake-up call. "Wer Arbeitsplätze sichern will, muss jetzt für echte Technologieoffenheit und für den Industriestandort Europa einstehen", he declared. With this position, he is pushing for a broader approach that treats various drive technologies as equal.

Position of the Economics Minister

The minister also warned against simply looking away from the unequal impact within Europe. "Wenn Österreichs Autoindustrie unter den derzeitigen europäischen Rahmenbedingungen stärker unter Druck gerät als jene in anderen europäischen Ländern, dann ist Wegschauen keine Option", said Hattmannsdorfer. The study makes clear that the current easing does allow more room for industrial and competition policy measures.

From the Fraunhofer Institute's perspective, the combustion engine ban hits manufacturers of powertrain components hardest – the segment in which Austria is disproportionately represented. The study therefore speaks of a "maximale Belastung" for these suppliers should the EU rules come into force in their current form.

Industrial Policy Considerations

The findings place Austrian industrial policy before a difficult balancing act: on the one hand, the industry is tightly integrated into European supply chains; on the other, a large share of domestic value creation depends on technologies surrounding the combustion engine. What measures will follow at the national and European level remains open.

The study itself does not provide a definitive answer as to how many of the currently endangered jobs could be preserved. It does, however, point out that technology-open framework conditions, combined with the use of renewable fuels and CO2-reduced materials, could at least mitigate the losses in value creation.

For Austria's automotive industry, the forecast means that the pressure to transform will increase significantly in the coming years. The upcoming negotiations in Brussels are therefore seen as decisive for whether and to what extent the industry will be able to maintain its workforce.