ACEA — 2024-02-29
News from Brussels
As visitors to the Geneva International Motor Show this last week of February 2024 can witness first hand, the European auto industry is up against massive global competition as it makes the seismic shift from combustion engine to battery-electric cars in a very short time frame.
We took this opportunity to gather international journalists, a renowned academic – Tommaso Pardi of the French National Centre for Scientific Research – and our President, Luca de Meo, to ask: how can we stay in the race?
As Mr Pardi explained, today foreign electric car makers are ahead in the race as they hold a competitive advantage over Europe. They have invested earlier and are more vertically integrated in the battery value chain, with easier access to raw materials. They have bigger economies of scale, and, crucially, they do not have the burden of phasing out 17 m combustion engine cars in just over in ten years. Europe on the other hand has “put the ‘electric’ cart before the ‘battery’ horse”, leading to strategic foreign dependencies.
So, what is the solution? In Pardi’s words, we urgently need “a comprehensive and coordinated” automotive industrial policy, with a real strategy connecting the pieces of the Green Deal puzzle. Mr Pardi’s message was clear: Europe needs to wake up!
His messages echo the ACEA manifesto, where we call for a holistic EU industrial strategy across all steps of the value chain – from R&D, mining, refining, components, and manufacturing; to charging networks, energy, purchase incentives, and recycling.
Mr de Meo stressed that all these conditions should be firmly in place to make it possible to meet the rapidly approaching combustion engine phase-out date in 2035. “As business leaders, we will do everything to put our companies in the position to comply. We are there to push progress, to push for Europe to be innovative, and electrification is one of the innovation fields when it comes to transport,” explained de Meo. “There is no way that the industry would recommend going back to square one, because it doesn’t make sense, and it is bad for the environment.”
The industry’s commitment to electrification is crystal clear, but we cannot do this alone. With this in mind, a robust and meaningful interim review of the CO2 regulation is crucial – something Ursula von der Leyen also recently acknowledged. And for this, we will need to clearly define how to measure success and how we will determine if we are on the right trajectory for 2035.
Between now and then, we count on the EU to step up to the momentous challenge by putting the appropriate framework conditions in place: access to charging points, affordable green energy, purchase incentives, tax schemes, and much more. A skills transformation of the labour force is also an essential piece of the puzzle.
As Tommaso Pardi put it, “The electric car market is like a rocket – but it needs a push to get to orbit.” It is only by working together – across the automotive ecosystem and with policy makers – that we can give the market the push it needs.
We will be taking up this theme of collaboration across the whole ecosystem next week of March 2024 during our #FutureDriven Reception in Brussels. On this occasion, Alexander Vlaskamp, CEO of MAN Truck & Bus; Peter Wennink, President and CEO of ASML; and Leonhard Birnbaum, CEO of E.ON, will join Luca de Meo and I to discuss how all players can work together to create true European champions, and reduce reliance on foreign competitors. This promises to be another fascinating and timely debate!