Automotive News Europe — 2024-10-16
Automotive Industry
"Every second we spend pausing is time we lose to improve" European competitiveness, Stellantis CEO Carlos Tavares said at the 2024 Paris auto show.
Any delay to the 2025 EU emissions targets will only mean that European automakers will fall further behind their rivals from China, Stellantis CEO Carlos Tavares said at the Paris auto show this week.
A number of European automakers, including Renault and Volkswagen, as well as the lobbying group ACEA, have urged the European Union to review, suspend or modify the 2025 targets, which are about 15% tougher than the current rules, because the market for electric vehicles has slowed significantly.
Automakers that miss their target face a fine of €95 per gram per vehicle; recent estimates say the industry faces total fines of €15 bn based on current emission figures and sales of electrified (full-electric and plug-in hybrid) cars.
Tavares, himself a past president of ACEA, said Stellantis is ready for the new targets, which roughly translate to an EV market share of 20 to 25%; EVs make up less than 15% of the European market now.
“We will be compliant without the purchasing of credits,” Tavares said on 15 October 2024 at the Paris Automotive Summit held on the sidelines of the Paris auto show. He was referring to the option for automakers to pool their emissions.
Renault Group CEO Luca de Meo said he would be open to purchasing credits if it meant avoiding fines.
He said at the summit that the 2025 emissions target would “force us to do things we shouldn’t do,” including pushing EV sales and holding back production of internal-combustion cars.
De Meo, BMW Group CEO Oliver Zipse, Valeo CEO Christophe Perillat and Tavares were among speakers at the summit, along with the CEOs of Total Energy, the French telecommunications company Orange and John Bozzella, the president of the global automotive constructors’ group OICA.
Tavares and other speakers said that Europe faced a competitivity gap to Chinese automakers, who have vertically integrated their EV supply chain from raw materials to batteries and electric motors.
“The harsh reality is that our Chinese rivals build EVs for one-third less than we do,” Tavares said. “We need to raise our game. Every second we spend pausing is time we lose to improve.”
De Meo, speaking earlier, said that Chinese brands can develop a car in two years, a time span he “wouldn’t have thought possible.”
“But we know what we have to do now,” he said. “This is a race we won’t escape.”
Tavares said that Stellantis had gained insight into how Chinese brands develop EVs through its purchase of a 20% stake in Leapmotor. “We can see that if you want to fight against the Chinese you need the same cost structure. It’s not rocket science; we can do it.”
In addition to competition, Tavares said there is an “ethical” responsibility to keep emissions targets in place, for 2025 as well as the EU’s 2025 mandate that only zero-emission cars can be sold.
“Yes, 2025 is going to be a tough year, but what is a tough year compared to the fact that our planet is on fire,” he said, citing recent flooding, fires and hurricanes, including rampant wildfires in his home country of Portugal that had burned 130,000 hectares.
“Where is the ethical responsibility, where is the courage?” he said.
If automakers have to push 25% EV sales to make emissions targets rather than a “natural level” of 10 to 15% and make lower profits, “this is marginal compared to the problem we have to solve,” Tavares said.
“If we pause, not only are we not facing our ethical responsibilities, but from a business standpoint, we completely disconnect from our race with the Asians, which means we are over,” he said.