Italy and Spain call for revision of EU tactics on automotive industry

In the wake of establishing a new European Commission, Italy and Spain are urging officials to revise the policies concerning the scheduled ban on combustion engine sales and the import tariffs for Chinese carmakers.

Italy wants to accelerate the planned revision to the 2035 ban, which it calls ‘absurd’, while Spain calls for a less harsh stance in the tariffs negotiations with China. Though the opposition from the Mediterranean countries isn’t new, it illustrates how the struggling adoption of EVs is raising pressure on the EU administration.

At the TEHA business forum in Cernobbio, Industry Minister Adolfo Urso pleaded for an earlier review of the regulation in 2024, two years ahead of the scheduled evaluation. Urso stressed that clarity is essential for companies and workers amid an uncertain market landscape.

Remarkably, he pointed foremost to the winter the German automotive industry faces, joining ranks with outgoing European Commissioner for the Internal Market Thierry Breton, who sounded a similar bell in previous days.

These reactions were triggered by Volkswagen CEO Oliver Blume’s statement that the future of his company was at stake in a challenge that remains unequaled in automotive history.

The 2035 ban is ‘absurd’

Italy has a well-rooted legacy in internal combustion engines. It faces the prospect of losing much of its know-how as the production switch to electric drivelines and battery cell manufacturing won’t compensate for its current industrial footprint.

Fearing job loss for an electorate workforce, Prime Minister Giorgia Meloni’s government believes member states should have more flexibility in choosing technologies to meet emission targets, advocating for a more gradual transition away from combustion engines. Energy Minister Gilberto Pichetto Fratin called the ban “absurd” and driven by an “ideological vision.”

Italian officials say their country is not against developing and producing electric vehicles but argues that this broader range of propulsion systems should include more efficient hybrids and CO2-neutral fuels like synthetic and biofuels. The country also advocates for a greater focus on decarbonizing the existing vehicle fleet.

Firing in both directions

Within the member states, Italy has never been the most ardent proponent of the ban on combustion engines. As the EU establishment is in a negotiating position over its formation and market trends show alarming signs, it wants to ride the wave of uncertainty in its favor.

As mentioned, the EU has scheduled a revision and final format for the loophole for synthetic fuels in 2026. Italy wants to seize the momentum and calls for a drastic overhaul of the Green Deal as soon as possible.

But stakeholders are firing in both directions. Stellantis, the automotive giant that dominates national automotive production as the mother company to Fiat, Alfa Romeo, and Maserati, is experiencing declining sales in Italy and has delayed the conversion of its engine plant in Termoli into a battery production facility.

Stellantis attributed this decision to the limited demand for electric vehicles and the lack of charging infrastructure in Italy, drawing criticism from the Italian government.

‘Build bridges, not barriers’

Spain’s Prime Minister Pedro Sanchez has urged European Union member states to reassess their stance on imposing tariffs on Chinese electric vehicles. Speaking in Shanghai, Sanchez highlighted the need for a unified approach to avoid a trade conflict that could harm EU industries. “We do not need another war, especially not a trade war,” Sanchez stated.

China is lashing back at Europe’s provisionary surplus import tariffs (up to 36.7% for car companies who didn’t collaborate in an investigation over unfair government subsidies). In a surprise move, Beijing decided to launch an anti-dumping investigation into European pork imports, which hits Spain in particular as it is one of the major pork exporters to China.

Sanchez emphasized the importance of finding a balanced solution through dialogue, suggesting that the EU and China should seek a negotiated compromise within the World Trade Organization (WTO) framework. He underscored Spain’s intention to play a constructive role in bridging the gap between the EU and China, stating, “We need to build bridges, not barriers.”