Delays in the automotive sector and microchip shortages

Subject: Delays in the automotive sector and microchip shortages

The automotive industry is going through a serious crisis: in October alone, new vehicle registrations in Europe plunged by 29.3% compared to 2020.

The causes are mostly related to problems in the supply chain, which has been slowed down by supply that is unable to cover the resumption in demand growth after the recent lockdown. This, together with soaring energy prices, is also contributing to inflationary pressure.

The most critical situation concerns microchips, which are imported by mainly Asian suppliers and are essential in the latest generation of cars, which have a much higher number of electronic components than in the past.

The Commissioner for Competition has recently confirmed that, through a future revision of competition policy instruments, he could finance the production of these microchips in Europe, given that they are vital for industries and increasingly strategic also in the fields of artificial intelligence and the digital revolution.

In view of this:

1. What timely measures does the Commission intend to take in order to prevent bottlenecks in the automotive sector from continuing to cause delays and price rises for final consumers?

2. Will it initiate discussions with industrial groups in the automotive sector in order to prevent the current crisis from adversely affecting employment levels in the sector?

Answer given by Mr Breton on behalf of the European Commission

(22 February 2022)

The Commission closely follows the situation of the semiconductors shortage and is aware that it affects both the automotive industry and the consumers. This situation cannot be solved easily in the short term as it results mostly from chips sourcing strategies by the automotive industry over the past years.

However to address the issue in the medium term, the Commission provided an in-depth analysis of the semiconductors sector with the updated Industrial Strategy (1), and launched the Alliance on Processors and Semiconductor technologies (2). In addition, European Chips Act, adopted on 8 February 2022 (3), will create the investment conditions and ensure security of supply along the entire value chain to better withstand possible future crisis.

Regarding employment, the state aid Temporary Framework was prolonged by the Commission until June 2022 to continue to provide Member States with flexibilities in the short term to protect jobs and to support the sectors affected by the COVID-19 outbreak.

Looking at the future, the Recovery and Resilience Facility (4) will support investment and jobs in new green and digital technologies. Moreover, the Automotive Skills Alliance (5) is committed to upskill and reskill 5% of the workforce, i.e. 700 000 people, each year over the coming years. Assuming a training investment of EUR 10 000 per person, this would mean a potential overall private and public investment of EUR 7 billion.

⋅1∙ https://ec.europa.eu/info/sites/default/files/strategic-dependencies-capacities.pdf

⋅2∙ https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3733

⋅3∙ https://digital-strategy.ec.europa.eu/en/policies/european-chips-act

⋅4∙ https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R0241&from=EN

⋅5∙ https://automotive-skills-alliance.eu/