Technical background report: A component-based analysis of the passenger car production with a special focus on Austria and the EU

This technical background paper summarises ASCll's initial research into the automotive industry. lt lays
the methodological groundwork for future research by outlining the methodology used to analyse the
automotive industry's transition from internal combustion engines to battery electric vehicles. The method
relies on a component-based approach. The analysis focuses on passenger cars, and includes trade
specialisation, diversification paths and regional production structures. The bill of materials differs
significantly between the two technologies. Electric vehicles are less complex in terms of the powertrain
but require more complex electrical energy storage systems. In particular, China has a comparative
advantage in almost all EV-specific components, even in segments where few other countries have a
co mparative ad vantag e. The d ata sup po rt the view that (Up per) Austria is stro ng in co m b ustio n techno logy.
However, the skills required to produce electric vehicles and their components are available, suggesting
growth potential forsome firms. A product space analysis suggests that electric vehicle technologies are
based on a different skill base than combustion engine technologies, making it difficult to diversify from
combustion engines to electric vehicles. This has potentiallyfar-reaching implications forpolicy makers and
business decision makers. The research methodology is clearly defined, and its limitations acknowledged.
Both the methodology presented, and the initial results form the basis for subsequent policy-relevant
research questions. Notably, the component approach hints on production capabilities and does not inform
about the quality of the final good.