EU car industry faces competition from Chinese electric vehicles

The European Commission defended this Tuesday in the European Parliament the prohibition de facto of the sale of new gasoline and diesel cars from 2035, and underlined the left-right divide among MEPs on the key objective of climate policy.

Economy Commissioner Valdis Dombrovskis said in Strasbourg that “the target has created certainty for manufacturers and investors“, but it has also given enough time to plan a just transition.

Binding targets have also been set for the deployment of infrastructure such as charging points, Dombrovskis stressed, while acknowledging that deployment across Europe has been “uneven” so far. “It is urgent to expand and evenly distribute charging infrastructure to support the increased adoption of electric vehicles in all EU Member States.”

Jens Gieseke, head of transport policy for the centre-right European People’s Party (EPP), referred to the same issue as evidence that “the transformation is not working”. Europe was unprepared and lacked “the necessary infrastructure for electric vehicles,” the German legislator said.

Gieseke – followed by other MEPs from the EPP and more right-wing parties – also pointed to the imminent deadline for a provisional target for reducing CO2 emissions from cars. Manufacturers are far from their goal and face multimillion-dollar fines if they do not radically change your portfolio of sales.

“By 2025 we face the risk of having to pay millionaire sums“Warned Gieseke, adding: “The automobile industry is in a huge crisis. The legislative framework is too narrow and inflexible. The consequences are dramatic“.

The dead end of electric vehicles

In 2023 they will be sold 10.7 million passenger cars in the EU, Norway and Iceland, with an average of 106.6 grams of CO2 emissions per kilometer under test conditions, according to provisional June data from the European Environment Agency. This is a figure much lower than the current limit of 115.1 grams, which will be reduced to 93.6 grams next year under the legislation in force since 2019.

In fact, with car manufacturers facing a penalty of 95 euros per vehicle sold for every gram by which their fleet average exceeds the limit, last year’s sales and emissions data would translate into a fine of more than 13,000 million euros for the entire sector if they were repeated in 2025. Failure to meet the target for vans would probably add a couple of billion to the total.

For Gieseke, the solution is to repeal the ban on combustion engines, “an old request” of the German conservatives of the EPP. He also advocated for “a broad approach” to decarbonization. “Focus on electric vehicles It’s a dead endwe need a broad mix of technologies, we also need to recognize climate-neutral fuels,” said the MEP.

Mohammed Chahim of the center-left Socialists and Democrats group warned that China is “overtaking” the EU in the development of its electric vehicle industry, echoing Dombrovskis’ observation that European manufacturers face lower energy and raw material costs 30% higher to those of its main competitor.

“Chinese electric cars are much cheaper; they have taken the lead in that technology,” warned the Dutch legislator. But he defended that the solution is not to abandon the objectives of climate policy. “Businesses and colleagues pushing to delay and roll back legislation They only think about short term profit and not in the future of European workers and, more importantly, European consumers,” Chahim said.

Despite Chahim’s words, the debate among lawmakers seemed to overlook the issue of addressing the technological gap with the Chinese electric vehicle and the closure of plants across the EU. The EU has sparked a trade war by imposing tariffs on imports of Chinese electric vehicles, alleging unfair state subsidies that Beijing denies.

Chinese industries enjoy an advantage “in batteries, software, infotainment systems,” Dombrovskis warned in his keynote speech. “There is a world race by net zero emissions technologies,” he said, noting that the International Energy Agency has predicted that one in five cars sold this year will be electric. “Europe cannot afford to be left behind and lose their competitive advantage in this race,” the commissioner warned.