Rumours have been circulating for weeks that European automakers are resisting the EU’s decision to prohibit internal combustion engine (ICE) vehicles by 2035, sparking concerns about the industry’s future. The Association of European Automobile Manufacturers (ACEA) has made a significant shift, abandoning its prior reluctance and fully embracing an electric vehicle (EV) dominated future. What drives success in this industry remains a mystery.
At the Geneva Motor Show, Luca de Meo, President of the ACEA and CEO of Renault, told journalists that the automotive industry does not want to take part in “arguing against the regulations”.
The CEO emphasized, “We’re not vying for a spot in the 2035 competition.” “Now, let’s drill down to the specifics.” He emphasized that achieving the 2035 emission reduction target “is entirely feasible,” but stressed that “clear parameters need to be established.”
Nonetheless, a tentative tone…
If regulatory guidelines shift suddenly, De Meo noted that the company’s massive investment in electrification – totalling billions of dollars – could potentially go to waste. “There’s no way the industry can go back to square one.” one. The proposed factory will have negative environmental consequences,” he cautioned.
Despite the progress made by automakers, they are still advocating for enhanced government backing, including incentives and funding, to accelerate the development of charging infrastructure and boost electric vehicle (EV) adoption rates further. In 2024, numerous EU incentive packages saw the introduction of a finale or a drastic reduction.
The European automotive trade faces unprecedented pressure from Chinese rivals and Tesla, whose sales of electric vehicles (EVs) in the region exceed those of any other brand. As industry giants Volkswagen, Renault, and Stellantis deliberate joining forces to manufacture affordable electric vehicles, they may be driven by a sense of inevitability rather than enthusiasm.
Recently, auto manufacturers have been pushing hard for the EU to slow down its transition to electric vehicles (EVs), much like what’s happening in the US – a move that could have catastrophic consequences for the environment? As anticipated by an earlier report, the EU is now assessing the implications, with automakers swiftly mobilizing their lobbying efforts ahead of the European parliamentary elections in June. Porsche’s Chief Financial Officer Lutz Meschke cautioned that the European Union may reconsider and potentially bring forward its planned 2035 ban on internal combustion engine (ICE) vehicles, in response to slowing demand for electric vehicles (EVs).
Electrek’s Take
It’s reassuring to hear that this situation is unlikely to occur. Some may view this as a public relations effort to promote the adoption of electric vehicles, with an underlying motivation to encourage immediate purchases. As a result, automotive manufacturers have struggled to accelerate their electric vehicle transition sufficiently, leaving the broader industry, which supports tens of thousands of jobs, feeling the impact. Thousands of different jobs are at risk on the road as Volkswagen slashes hundreds of positions in Germany to cut prices by $11 billion, while EU auto suppliers shed tens of thousands of employees – just last week a major auto supplier for Tesla, VW, and Ford announced it was cutting 10,000 jobs.
Despite these changes, new trends emerge, as manufacturing shifts gears, with innovative designs showcased at the Geneva auto show, thanks in part to BYD’s significant presence. BMW is committing $711 million (€650 million) to revamp its flagship manufacturing plant in Munich, with a goal of fully transitioning production to electric vehicles by the end of 2027, paving the way for its new-generation Neue Klasse EV models to hit the market. The automaker has achieved its target of capturing a 15% market share of battery-electric vehicles, with plans to accelerate production by promoting nearly half a million BEVs in 2024.
