Brussels (Belgium) (AFP) – The EU promised Thursday an “action plan” to help the bloc’s beleaguered auto sector as it faces mounting pressure to ease green targets for an industry beset by Chinese competition. EU chief Ursula von der Leyen held talks with industry leaders in Brussels in a show of support for a sector that employs 13 million people and accounts for about seven percent of Europe’s GDP — amid a broader push to revive the continent’s competitiveness.
“The European automotive industry is at a pivotal moment, and we acknowledge the challenges it faces. That is why we are acting swiftly to address them,” von der Leyen said. The so-called “strategic dialogue” brought together carmakers, suppliers, civil society groups, and trade unions — chaired by the European Commission president who pledged an “action plan” by early March. Representatives of 22 industry players including Volkswagen, BMW, Mercedes, and Renault participated in the meeting, the commission said.
The talks saw car industry representatives launch a “big attack” on emission standards set by Brussels — and related fines, said William Todts, executive director of clean transport advocacy group T&E, who was in attendance. “They don’t want to pay the penalties. They want to make changes to 2035,” he said, referring to the EU’s ambitious target to phase out the sale of fossil fuel-burning cars within the next decade. “They made very little proposals on how to actually stimulate the market for electric vehicles in Europe, and I thought that was disappointing.”
The get-together came as the commission embarks on a pro-business shift, with firms complaining its former focus on climate and business ethics has led to excessive regulations. On Wednesday, it unveiled a blueprint to revamp the bloc’s economic model, amid worries that low productivity, high energy prices, weak investments, and other ills are leaving the EU behind the United States and China. The car industry has been plunged into crisis by high manufacturing costs, a stuttering switch to electric vehicles (EV), and increased Chinese competition. Announcements of possible job cuts have multiplied. Volkswagen plans to axe 35,000 positions across its German locations by 2030.
Carmakers have been calling for “flexibility” on the steep emission fines they could face in 2025 — something the bloc’s new growth blueprint said should be in the cards. “Penalizing immediately the industry financially is not a good idea, because the industry is in trouble and…has to restructure itself, which will cost a lot of money,” said Patrick Koller, CEO of French parts producer Forvia ahead of the meeting. He later described the talks — which lasted more than three hours — as “positive,” adding that while no promises were made, the early March deadline showed the commission wanted to “move quickly.”
About 16 percent of the planet-warming carbon dioxide (CO2) gas released into the atmosphere in Europe comes from cars’ exhaust pipes, the EU says. As of this year, carmakers have to lower the average CO2 emitted by all newly sold vehicles by 15 percent from 2021 levels or pay a penalty — with tougher cuts down the road. The idea is to incentivize firms to increase the share of EVs, hybrids, and small vehicles they sell compared to, for instance, diesel-guzzling SUVs. Some manufacturers complain that this is proving harder than expected as consumers have yet to warm to EVs, which have higher upfront costs and lack an established used-vehicle market. But critics say lifting the fines would unfairly penalize producers who have invested to comply.
A senior EU official said incentives for businesses to buy electric fleets are an option. Improving a patchy charging network, loosening China’s grip on battery production, and requiring vehicles to be mostly made with parts manufactured in Europe were among other ideas discussed on Thursday, according to sources in attendance. EV sales slid 1.3 percent in Europe last year, accounting for 13.6 percent of all sales, according to the European Automobile Manufacturers’ Association (ACEA), an industry group. Of those, EU data shows 14 percent were Chinese electric cars by mid-2024, a rapidly growing share. Brussels has imposed extra import tariffs on China-made electric vehicles of up to 35.3 percent after concluding Beijing’s state support was unfairly undercutting European automakers.
© 2024 AFP
