The evolution of the automotive sector in Italy. The impact of sustainable mobility on economy and work

The transition to electric vehicles will generate a 6% increase in employment in Italy by 2030, approaching 300,000 employees

05/06/2023 Divulgatory Research Download PDF

Employment in the Italian automotive sector will rise from the current 280,000 to 296,800 by 2030, thanks to the transition to electric power.
Sales of electrified cars (hybrid and electric) continue to increase, in Italy in 2021 +199% over the previous year, in Europe in March 2023 +43% electric cars, +35% hybrids at the end of April.
Electrification is an opportunity for Italian SMEs specialised in the production of components, the creation of charging infrastructures for electric vehicles alone will generate over 4 thousand direct jobs.
Italy, with its long tradition in the automotive sector and its expertise in the design and production of high-quality vehicles, has the potential to lead the transition to electrification.
Italy is the second most motorised country in the EU: registrations will increase by 11.6% by the end of the year. Today in Italy there are 76 vehicles on average per 100 inhabitants, led by Valle d’Aosta (257 cars per 100 inhabitants) and Trentino-Alto Adige (132). The best-selling cars in Italy in 2023 are Fiat Panda (9.31% of total sales), Dacia Sandero (4.22%) and Fiat 500 (3.90%).

The real impact of raising awareness of sustainable mobility in the long term is not only in the increasing use of less polluting or electric cars, but above all in the world of work. Italians are indeed beginning to understand the cost-effectiveness over the years of electric cars, and the benefits for the environment and health, but the real return will come if sustainable public mobility solutions are boosted, investments are made in technological innovation that enables components to be recycled, and if there is a rapid reconversion of SMEs that will bring with it a radical retraining not only of the parts produced but also of the workforce, so that Italy can lead the transition towards electrification, today the 7th largest producer in the EU.

This is what emerges from the latest research by Rome Business School, ‘The evolution of the automotive sector in Italy. The impact of sustainable mobility on economy and work‘ by Fabrizio Zucca, automotive and sustainability expert, and Valerio Mancini, Director of the Rome Business School Research Centre.

“The elimination of pollutants necessarily passes through the decarbonisation of transport and highlights the need to adopt new and more radical approaches aimed at decreasing the use of individual means of transport, as well as a car fleet made up mainly of new energy carriers and non-polluting vehicles,” says Zucca.

Contrary to what is generally imagined, the industrial sector is not the main source of air pollution, but transport, residential and power generation are, producing 70% of harmful emissions. In Italy, the transport sector is responsible for 25% of total greenhouse gas emissions and 30% of CO2 emissions, with 92% of the latter directly attributable to road transport. It is therefore not surprising that, according to the European Environment Agency, almost 70,000 people in our country will die prematurely in 2020 due to pollution, mainly from fine particles.

The real challenges: recycling and reconversion of Italian SMEs

In Italy, sales of electrified cars (hybrids and electric cars) continue to increase, in 2021 +199% over the previous year, 38.4% of the total registered. Car registrations are also growing in the EU, with more electric cars (+43.2%) and hybrids (+35.8%) in March than in the same period in 2022. This is good news especially for the United States, the EU and China, which account for 60% of world car production and are the main markets. These numbers pose two main challenges-opportunities: recycling and SME conversion.

The new electric batteries, which have a useful life inside a car of 10-15 years, could have a second life as domestic accumulators or its components could be recycled. In this regard, the European Battery Regulation stipulates that by 2030 it will be mandatory to have 95% recyclability levels for cobalt, copper and nickel and 75% for lithium.

“In other words, it is very likely that the lithium that I am using on my battery today will provide the materials for the production of my son’s battery when it has completed its full cycle. Unlike the fossil fuel and its supply chain that I consume today and which cannot be reused in the future,’ says Valerio Mancini. Thus, there is no doubt that electric cars offer long-term economic advantages despite their higher initial price.

Not only that, the transition to a higher demand and production of electrified cars is a challenge for the automotive industry, but it also offers opportunities for SMEs specialised in the production of components.

“It is crucial to support the conversion of SMEs to new technologies and to encourage the adoption of new business models to ensure the competitiveness of the entire Italian automotive sector,” says Fabrizio Zucca. ‘So many jobs are at risk, but SMEs have the capacity and knowledge to adapt and thus mitigate the impact of the shift to electric mobility,’ he continues. Moreover, the creation of electric vehicle charging infrastructure, estimated at 3.2 million domestic charging points and 110,000 public charging points in Italy, will generate more than 4,000 jobs by 2030.

The consequences for the world of work

The automotive sector today employs almost 13 million people in Europe (7% of total employment). It is estimated that in Italy, the automotive sector will generate over EUR 90 billion, corresponding to 9.3% of the manufacturing sector and 5.2% of Italian GDP (Ainfa, 2022). The supply chain is made up of over 5,000 companies, most of which are located in Piedmont (37%) and Lombardy (32%) and in the first eleven months of 2022 produced +5.4% more cars domestically than the previous year.

The transition to electrification, the continuous technological evolution in autonomous driving and connectivity, will increase the demand for specialised figures such as software and electrical engineers and create 580,000 jobs in the battery and charging infrastructure sectors in Europe, but will also result in the loss of 630,000 jobs in traditional car-related sectors in the EU. The transition will take place in two phases, with a consolidation phase planned between 2025 and 2028. In the specific case of Italy, a study carried out by Motus-E and Cami, the Center for Automotive and Mobility Innovation, estimates the employment numbers to be on the rise: there will be 296,800 total employees in the automotive sector in 2030, an increase of +6% compared to 280,000 in 2022.

The car market in Italy today and future transition

Italy is the second largest country in the EU in terms of the number of cars in relation to population, with approximately 663 vehicles per 1,000 inhabitants, second only to Luxembourg (681 per 1,000 inhabitants) and much higher than Germany (574), Spain (513), France (482) and the United Kingdom (473). Analysing the first four months of 2023, a growth of 26.9 % is observed in the Italian car market compared to the same period of the previous year. Registrations amounted to 552,850 vehicles, compared to 435,681 registrations in the period January-April 2022, and according to forecasts by the Unione Nazionale Rappresentanti Autoveicoli Esteri (UNRAE), it is estimated that the annual volume will reach about 1,400,000 units, representing an increase of 11.6% compared to 2022, although it is still 23.3% lower than in 2019.

Valle d’Aosta is the region with the most cars (2021), with 257 per 100 inhabitants, followed by Trentino-Alto Adige (132). Turning instead to municipalities, Rome is in first place in 2022 with 1.75 million registered cars, with 62 cars per 100 people. At national level, there are mostly Fiat Panda, topping the charts in April 2023 with 9.31% of total sales; Dacia Sandero (4.22%); and the Fiat 500 with (3.90%).

The necessary shift towards increasingly sustainable mobility brings with it many challenges for the automotive sector, but also offers many opportunities. Italy, with its long tradition in the automotive sector and its expertise in the design and production of high-quality vehicles, has the potential to lead this transition, but a widespread culture among Italians is needed. We must continue to educate and raise awareness of environmentally friendly transport alternatives and the importance of reducing harmful emissions.

It is also crucial for Italy to adopt ambitious policies, through targeted investments in research and development of increasingly efficient technologies, expansion of infrastructure such as charging points, and integration of intelligent traffic management systems.

“Italy has the capacity to become a leader in the sustainable automotive industry, creating jobs and fostering economic development. Collaboration between the public and private sectors, together with targeted policies and strategic investments, will be crucial to meet the challenges and seize the opportunities offered by sustainable mobility,’ says Fabrizio Zucca.

Only in this way will Italy be able to have a real influence in the development of trends in the sector, such as electrification and the development of zero-emission vehicles, the implementation of advanced technologies and connectivity with driver assistance systems, the rise of ridesharing services, and finally the incorporation of automation and artificial intelligence.

“It is important to note that these trends are subject to many variables, such as technological advances, government policies, consumer preferences and environmental challenges. But certainly the sector will continue to grow in Italy and internationally,’ Mancini concludes.