The European Commission’s upcoming Automotive Action Plan offers a crucial opportunity for the EU to solidify its leading role in clean technology and sustainable mobility.
The Imperative of Ambitious EV Targets
Recent calls to weaken the EU’s targets for automobile carbon dioxide emissions are misguided. Opponents argue such targets will harm European competitiveness. However, scaling back now would be a costly error. The EU must remain steadfast in its commitment to cleaner technologies, ensuring the affordability of electric vehicles (EVs) and providing incentives for a stable transition in energy and transportation.
Navigating the Global EV Landscape
Our automotive industry confronts increasing global competition, particularly from China’s state-supported industry and the U.S.’s Inflation Reduction Act. These policies aim to make their nations global EV leaders. The EU cannot afford to waver. Hesitation would concede the future of mobility to our competitors. Ambitious targets are not a hindrance, but a catalyst. For instance, the 2035 phase-out of combustion engines gives manufacturers the certainty they need to innovate and establish new supply chains, especially for vital battery storage.
The EU’s Green Deal and Fit for 55 package have already spurred substantial investment in battery production and charging infrastructure. Retrogressing would undermine investor confidence and slow down progress.
Making EVs Affordable through Mass Production
The key to affordable EVs is mass production. We’ve seen this with solar panels and wind energy, which have decreased in price due to the right incentives. Similar effects are beginning to emerge in the EV sector. Lower-priced EVs, manufactured in the EU are on their way. Following successful production of more expensive models, various manufacturers are rolling out smaller, less expensive designs.
The European Commission’s focus on electrifying corporate car fleets, possibly by 2026, is a promising iniative. Corporate cars comprise over half of new car sales in the EU annually and often appear on the second-hand market at competitive prices. Therefore, an electrification mandate would significantly boost the second-hand market.
Supporting EU Competitiveness
The upcoming EU Automotive Plan represents the opportunity to revitalize our struggling car sector by investing in skills, infrastructure, and affordability measures. This includes supporting local manufacturing, including joint ventures and technology transfer requirements for foreign companies.
Local content requirements can protect the automotive sector from unfair global competition. Countervailing duties should also be considered, with revenue potentially directed toward investing in charging infrastructure. Subsidies should also be considered, potentially sourced from reallocated pandemic-related funds or EU tariffs on Chinese-made EVs. However, any such subsidy policies must be harmonized across the EU, as the current mix of national measures is ineffective.
The future of mobility is electric, and it’s increasingly our current reality. The question isn’t if, but who will lead this transition. The EU can be at the forefront, but only if we commit to our ambitions.
