European Commission regulators publish a five-point plan to help the continent’s domestic automakers help sell more battery-electric vehicles.
Topping the plan is the previous reported scheme to give automakers three years to achieve sales of 25% of their vehicles as BEVs, the target that had been set for the end of this year.
However, Europe’s automakers are currently only achieving an average of 13.6% BEV sales and would have been hit by massive fines had the commission not changed tack. This will be further reviewed during the second half of this year.
The EC is responding to protests from automakers that that they are struggling to sell their BEVs as most European governments have cut consumer incentives, and European Union tariffs on cheaper state-subsidized Chinese products are not leveling the trading playing field enough to allow them to compete.
The commission’s hand is forced by the reality that Europe’s auto industry currently provides 7% of the EU’s gross domestic product and employs about 14 million people across the economic bloc.
Another plank of the plan focuses on the industry’s over-reliance on foreign components, specifically battery packs made in China. So, the commission announces the creation of a €1.8 billion ($1.92 billion) fund to create a secure and competitive supply chain for battery raw materials and the acceleration of battery manufacturing within EU nations.
It also stresses the importance of advancing automakers’ leading role in artificial intelligence-powered connected and automated vehicle production.
The commission promises a further €1 billion ($1.07 billion) funding for this to cover 2025 to 2027. A further €570 million ($610 million) will target boosting the continent’s inadequate public BEV charging infrastructure.
Presenting the plan, commission President Ursula Von der Leyen says it lays out further support to retrain workers in the auto industry and promises further support to SMEs.
She also reiterates that the commission is sticking with its zero-emissions vehicle sales targets for 2030 and 2035. Currently, the goal is to progressively lower the emissions of the new vehicles until 2035, when only zero-emission new cars can be sold in European markets.
That said, the debate on allowing new carbon-neutral-fueled internal-combustion-engine hybrids beyond that date, a suggestion supported by several automakers and the country of Italy, is still on the EU schedule for a decision next year.
Meanwhile, the commission says it wants to boost demand for European zero-emission vehicles and publishes a new proposal to decarbonize commercial vehicles which represent 60% of new-car registrations in Europe.
Facing the invasion by Chinese automakers and the threatened import tariffs by the U.S., the commission wants to “ensure a level playing field” by using a mix of instruments including anti-subsidy measures, as well as free-trade agreements.
It points to India as one of the “like-minded” countries with which the EU could possibly agree on beneficial trade arrangements.
Von der Leyen says: “We will promote domestic production to avoid strategic dependencies, especially for batteries production. We will stick to our agreed emissions targets but with a pragmatic and flexible approach.”
In response, the European Automobile Manufacturers’ Assn. (ACEA) says while broadly welcoming the plan, “key elements are still missing… Ambitious actions to boost infrastructure, demand incentives and measures to reduce manufacturing costs are needed for cars, vans, trucks and buses.”
Sigrid de Vries, director general of ACEA, adds: “The proposed flexibility to meet CO2 targets in the coming years is a welcome first step towards a more pragmatic approach to decarbonization dictated by market and geopolitical realities. It holds the promise of some breathing space for car and van makers, provided the much-needed demand and charging infrastructure measures now also actually kick in.”
