Europe’s embattled carmakers are hoping for a reprieve when Brussels unveils a car sector package on Tuesday, which could water down an effective ban on new combustion engines initially slated for 2035 as a shift towards electric engines stutters.
The continent’s carmakers, from Volkswagen to Renault, had high hopes for the electric vehicle (EV) shift when they set ambitious targets at the beginning of the decade, efforts that have since collided with the reality of lower-than-expected demand and fierce competition from China.
What is expected on December 16?
Brussels is set to unveil measures designed to support the regional car industry, one of the EU’s most important sectors, in the face of high energy costs, tariffs on exports to the US and Asian rivals eating into the bloc’s market.
Senior EU MP Manfred Weber, president of the largest party in the European parliament, the EPP, said on December 12 the European Commission would move to scrap plans for an effective ban on new combustion engine cars from 2035.
German carmakers and the European Automobile Manufacturers’ Association have called for a weakening of rules designed to boost battery or fuel-cell electric drive cars, while Fiat-to-Maserati owner Stellantis has warned the industry risks an “irreversible decline” without help.
The regulation that all new vehicles from 2035 should have zero emissions was adopted in March 2023 when the outlook for battery EVs was brighter.
The industry is now pushing for concessions. It hopes the European Commission will accept that CO₂-neutral fuels, such as biofuels, could continue to power internal combustion engines, as well as plug-in hybrids or range extenders.
Carmakers, including Europe’s biggest, Volkswagen, have argued that immovable targets no longer make sense and the market, rather than legislators, should decide when combustion engines are fully phased out. They favour instead incentives to boost demand for EVs.
Where did it all go wrong?
Demand is rising for EVs in Europe, but not at the pace carmakers had once planned for, with ACEA’s data showing a market share of 16% for battery EVs in the first 10 months of the year, up from 13% a year before.
Charging anxiety remains an issue for consumers, with central and eastern Europe behind on infrastructure, while high electricity costs are a concern in Germany.
Reuters
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