European Auto Market Face EV Crisis

   Europeans EV crisis.

European automakers arrived at the Frankfurt Motor Show armed with a host of new electric vehicles and a message to pass on to legislators: These cars will not solve the climate crisis on their own.

Authorized to speak on behalf of his colleagues and competitors, PSA Group CEO Carlos Tavares told reporters that the industry should no longer be criticized for inaction now that consumers will be able to find a zero-emission model in theaters. display that suits your needs.

The diminutive Opel Corsa-e and the sleek Porsche Taycan celebrated their public debut at the show, while Volkswagen added the cherry on top with its acclaimed ID3, the first in a family of affordable mass-market electric vehicles that are designed to be sold in the millions.

But automakers used the program to make it clear that product availability is only one factor, and customers must now complete the environmental equation by switching to new technology.

"Having electric vehicles in dealerships will not be enough," Tavares warned, calling for a coordinated, society-wide approach that includes a significant increase in charging infrastructure and significant financial incentives. "Freedom of mobility is fundamental to our democracy," he said.

Until now, the industry has struggled to move the needle of change.

Price range

High label prices, limited battery life, and an incomplete charging infrastructure have conspired to contain demand for electric vehicles. Sales volume barely recorded a bump in the first half of this year, with battery electric vehicles accounting for just 1.5 percent of the European Union car market. Plug-in hybrid electric vehicles accomplished about half of that.

Social critics chide the transport sector for failing to make any significant progress in the past two decades in reducing its absolute CO2 footprint. The shift in demand from more carbon-friendly diesel vehicles to gasoline cars in 2017, along with a growing market share of SUVs, reversed a decade-long trend of decreasing CO2 emissions from new cars. Last year, industry-wide emissions actually increased by 2 grams, to 120.4 g / km.

In response, the EU Parliament in April ordered a drastic 37.5 percent reduction in emissions from new cars by 2030. That means the industry must now cut its emissions level to about 60 grams per kilometer on average. , a dramatic reduction, or face hefty fines for non-compliance. .

If the industry had remained stagnant at its 2018 levels through 2021, it would be liable for fines of nearly $ 40 billion, all combined. Opel CEO Michael Lohscheller hinted that this was one of the reasons behind the August 2017 sale of Opel from General Motors to France's PSA group, when he admitted three months later that his company was on track to fail. on your target with "potentially dramatic consequences."

But now the April EU legislation poses a whole new dilemma.

Volkswagen Group CEO Herbert Diess has warned that its entry-level VW model, the 141-inch-long Up city car, has reached the point where it can no longer remain economically compliant with CO2 emissions by 2025.

The only solution, the Austrian executive emphasized here last week, is to launch the BEV and PHEV models. Diess even asked the leader of an environmental advocacy group protesting at the fair that VW still lives off its conventional car business for understanding.

"We plan to electrify 50 percent of our fleet in the next 10 years, and that is a huge challenge, so it is unfair to say that it is just a fig leaf," said the Volkswagen boss, when she accused the automaker of "absolute green wash."

Indeed, ambitious new EU fleet targets mean that Diess must now take the CO2 impact of a vehicle into account when calculating the profit potential of a new model. As a result, a high-margin vehicle that is a significant emitter of CO2 will end up being substantially less profitable.

A study published last week by the European Automobile Manufacturers Association ACEA suggested a very strong correlation between economic prosperity and battery car acceptance rates. Norway, a non-EU state and model for electric vehicles with its 45 percent share of the electric vehicle market, boasts a GDP per capita that is twice as high as the bloc average, for example. .

But getting to where Europe wants to be, with the massive acceptance of electric vehicles, will still require considerable investment in infrastructure, automakers say. Businesses estimate that they will need 2.8 million charging points by at least 2030. At the moment, there are not even 145,000 available across the EU. And three-quarters of them are in just four of the 28 EU countries: Germany, the UK, France and the Netherlands.

Almost all member states with less than one charging point per 100 kilometers of roads have a BEV and PHEV share of less than 1 percent, they say.

Paying paul

Public incentives will also be needed.

Mercedes-Benz head of sales Britta Seeger has argued in favor of imposing tariffs on high-emission vehicles, such as luxury sedans and SUVs, to increase revenue and help finance the purchase of electric vehicles. She believes that a policy of taxing one product segment to encourage support for another segment "would help get people excited about making a change."

The pressure on European industry continues to mount.

The EU is preparing legislation that will commit the bloc to a 2050 carbon neutrality target. Incoming EU Commission President Ursula von der Leyen has made a "European Green Deal" a cornerstone of her agenda. , including its plan for a carbon tax on Imports.

"There is no alternative," said Hans Michel Piech, a non-executive director of the Volkswagen Group board and a large shareholder, referring to the electrification of the industry. "Neither for us nor for our competitors."