Auto Makers Ask EU For Pause in EV Shift

"BERLIN -- As Europe moves closer to approving a legal ban on the sale of new cars with internal combustion engines, auto makers are calling for more time to make the shift to electric cars.

Lawmakers in the European Parliament on Wednesday approved a plan for cutting greenhouse gas emissions that includes a proposal to ban the sale of new cars that run on conventional engines after 2035. That puts fresh pressure on auto makers and suppliers to accelerate a shift most have already started from conventional cars to electric vehicles.

With millions of jobs in the European Union dependent on the auto industry, executives are warning that moving too fast could hurt automotive-parts suppliers especially hard. A too-quick shift could lead to big job losses at a time when the global economy is already strained, they said.

Hildegard Muller, president of the German Association of the Automotive Industry, said Europe wasn't ready for a full shift to electric vehicles. She said there was insufficient charging, big gaps in regulation and a lack of secure supplies of raw materials needed to build the cars and batteries.

"This decision refuses to accept that there is not enough charging infrastructure in large parts of Europe," she said. "It is therefore simply too soon for such an objective."

Though the vote in parliament is one step in a longer process, it increases the chances that the proposal to ban combustion engines will eventually become law.

The auto industry is under immense pressure amid supply chain disruption from a continued shortage of semiconductors, rising prices for fuel and raw materials and the sanctions on Russia.

The proposal from the European Commission, the bloc's executive body, must still go through negotiations involving representatives from the commission, parliament and EU governments. The parliament's vote represents its position going into negotiations.

"With these standards, we are creating clarity for the car industry and can stimulate innovation and investments for car manufacturers," said Jan Huitema, a member of the parliament from the Netherlands who will lead negotiations on the proposed rules.

During the first four months of the year, the latest period for which data is available, new-car sales in the EU dropped 14.4% compared with a year ago, to 2.9 million vehicles, according to the European Automobile Manufacturers' Association, or ACEA, an industry lobby group.

Growth in new electric car sales has been outpacing the overall market for new cars. Sales of new electrically chargeable vehicles -- battery electric vehicles and plug-in hybrids -- accounted for around 19% of all new car sales in the EU in the first three months of the year, according to ACEA. The market share of diesel- and gasoline-powered vehicles continues to decline, falling to 52.8% of new cars sold during the first quarter, ACEA said. The rest of the market is made up of a small percentage of vehicles powered by natural gas and other fuel sources.

Despite the momentum for EVs, industry leaders say the future is still uncertain and have called on the EU to accompany its plan with financing for building charging infrastructure and securing raw materials. Industry leaders said at the very least there should be a review period at the halfway point, providing time to shift gears if the market for EVs isn't ready for a ban on conventional vehicles.

"Given the volatility and uncertainty we are experiencing globally day-by-day, any long-term regulation going beyond this decade is premature at this early stage," said Oliver Zipse, president of ACEA and CEO of BMW AG." [1]

Financing for raw materials and charging infrastructure will be provided by the market as soon as all new vehicles will be only EVs. The pause in EV shift is not needed.

 

1.  Business News: Auto Makers Ask EU For Pause in EV Shift
Boston, William. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 10 June 2022: B.5.