Against the backdrop of “intensifying global competition, fragile supply chains, and rising protectionism”, the European Automobile Manufacturers’ Association (ACEA) Light-Duty Vehicle Board met last Thursday to assess the conditions required for Europe to maintain its global automotive leadership.

“Europe risks losing its edge, both as an attractive place to invest and as an industrial location, with significant consequences for jobs and innovation unless we can find a better way to synchronise climate ambition, business reality, and global competitiveness,” said current ACEA President and Mercedes-Benz CEO, Ola Källenius.

“At today’s ACEA Light-Duty Vehicle Board meeting, everyone agreed that decarbonisation is the way forward and that the flexibility proposed in the automotive package in December is welcome, but that it is insufficient to transform the automotive industry in the real world,” he added.

“European car and van manufacturers call on the European Parliament and Member States to strengthen the automotive package to ensure Europe remains a viable marketplace for cars and vans beyond 2030,” was his urgent call.

More flexibility

“The 2030 target for cars and vans represents a major challenge: if the EU battery-electric vehicle (BEV) market does not triple in four years, EU manufacturers face the risk of crippling fines,” warns ACEA.

“The only way to prevent this is to extend the current proposal for averaging from three to five years (2028-2032) and to extend the list of flexibilities and compensatory mechanisms for compliance beyond small and “made in the EU” BEVs.”

“The van market remains in a very precarious situation. Not only have overall sales contracted, but sales of battery-electric and plug-in-hybrid electric vans have barely risen above 10% of all new registrations. This means that achieving the current targets for vans is not possible: a 35% CO2 reduction target is needed for 2030 and an 80% target for 2035, combined with more flexible target averaging for 2025–2029 and 2030–2034,” ACEA pleads.

Too ambitious

And the automotive car lobby continues its lament: “Even with the proposed compensation mechanisms, credits for low-carbon steel, and sustainable renewable fuels, the Commission’s 2035 proposal still keeps 100% emissions reduction as the compliance threshold for avoiding penalties. This is not workable: the threshold should be lowered to 90%, and the compensation mechanisms, which constitute an essential flexibility, should become more feasible.”

“The current targets remain highly ambitious and can only be met alongside consistent EU-wide measures that genuinely boost demand. While the Clean Corporate Vehicle proposal is intended to accelerate uptake in this segment, its current design relies on mandates rather than incentives. This raises serious concerns about the effectiveness of such an approach,” ACEA complains.

According to the European manufacturers, there’s only one conclusion: “We welcome the automotive omnibus, yet the regulatory simplification exercise for our sector does not end here. The industry will be bringing new proposals to support the simplification agenda agreed at the EU leaders’ competitiveness retreat in Alden Biesen.”

“ACEA is closely reviewing the Commission’s proposal for the Industrial Accelerator Act. The key question is whether it will genuinely strengthen resilience and protect jobs, or add new costs and complexity for automotive manufacturers. If it’s the latter, it risks having the opposite effect by pushing up vehicle prices and shrinking the overall market,” ACEA concludes.

Dragging their feet

Although there are valuable elements in the criticism of European car manufacturers, especially regarding regulatory complications and policy consistency, we can’t overlook the fact that most of them have been dragging their feet.

The arrogance of some of them toward new players in the field, seriously underestimating them, and now trying to counter them by heightening pressure on policymakers, are signs of the same denial behavior. For sure, there are significant problems in the contemporary automotive world, but they won’t disappear through nostalgically sticking to outdated technologies or market patterns.

When we see the extremely cowardly behavior of American and Japanese car CEO’s toward the completely disrupting ukases of a Donald Trump, we can only hope that the European car bosses choose the right way forward, the way toward durable mobility of the future, in collaboration with the players that go in the same direction, be they Chinese or other (Asian?) contenders.