Italy has challenged Europe and Brussels seems to be taking up the challenge. A few days ago Giorgia Meloni asked the Commission for a truce in the ban on the sale of internal combustion cars from 2035 and called for a more gradual transition that takes into account “market realities” as well as freedom for each country to consider which technologies to use to decarbonise the automotive sector. “The request is understandable, since brands such as Ferrari, Lamborghini, Fiat and Iveco are concentrated in northern Italy. Some of these brands will have to continue with developments linked to combustion engines for long-distance transport, maritime or air transport,” says Antonio García, a researcher at the CMT-Clean Mobility Thermofluids University Research Institute (CMT) of the Polytechnic University of Valencia.
Meloni’s doubts are compounded by those of the report “The future of European Competitiveness”, better known as the Draghi report, in which the former president of the European Central Bank speaks of a lack of planning in the automotive sector and says that the ambitious climate plan is not accompanied by industrial policy.
The truth is that the European industry is not going through its best moment. Vehicle sales have not returned to pre-pandemic levels and sales of electric models have stagnated. In fact, according to a recent analysis by the consultancy Jato Dynamics, the best-selling car in Europe in 2024 is the Dacia Sandero. Drivers are still betting on small, compact, cheap combustion cars. Germany is one of the countries that has lost the most share of electric car sales this year, due to the withdrawal of purchase aids that the federal government approved at the end of 2023. The market in the country has plummeted by 20%. Such was the scare that they have just re-launched purchase aids.
Several brands, such as Volkswagen, Ford, GM, Volvo and Mercedes, have announced in recent months their intention to delay their production schedules for electric models. And not only are sales falling, but the profit margins generated by electric cars are also not good, they claim.
The truth is that the journey towards electric mobility is not linear in Europe and is still plagued by uncertainties. Germany already asked two years ago for some changes in this same law that requires the sale of only zero-emission carbon vehicles and now looks with concern Volkswagen’s announcement to close some plants in the country. If this happens, it would be the first time in 87 years.
There is a lack of fast charging points, says Draghi in his report. Of the 18,200 points, 80% are 22 kilowatts of power, which means that an average car would take three hours to charge. In addition, most of the battery production is in Asia. And sales, as we have seen, are not going well (behind which, the high prices of some electric models). In fact, recently the European Commissioner for the Internal Market pointed the finger at European brands for not having been able to convince customers of the benefits of buying an electric car and warned that The charging network remains highly concentrated in Germany, France and the Netherlands.
Meanwhile, China continues to dominate the market in Europe. Its sales share is now 23% and has increased fivefold since 2017. The Asian giant’s brands are offering their low-cost electric models for 20,000 euros. Behind them is the Chinese government, which began to establish aid plans for the sector as early as 2012 and which it still maintains today, and has initiated a plan to expand factories within the EU to avoid the consequences of possible European import tariffs.
A good policy?
Even the industry is not making things too clear. While the Renault director warned a few days ago that manufacturers could face Fines of up to 15 billion euros if they do not meet the climate objectives of reducing emissions (limits of 93.6 grams of CO2 per car) by 2025 and called for a truce, the CEO of Stallantis argues that “it would be surreal” to delay the objectives by two years. In this regard, the Transport and Environment organisation has just published a report stating that car manufacturers have the capacity to meet these objectives: electric cars will contribute 60%, on average, to achieving these CO2 reduction rates, thanks in part to “the seven new electric models of less than 25,000 euros that have come onto the market in 2024 and 2025”. “Some brands are saying they are worried, but we believe they can comply. It is time to accelerate the transition, because we already see what is happening with electric cars, that we are letting China beat us. If we do not push now we will lose the car industry altogether. This delay helps us make the hole bigger”, says Isabel Buschell, director in Spain of T&E.
Same engine
The Draghi report also mentions technological neutrality, something that has also been done by important leaders such as the CEO of Volvo who said that the company will continue to invest in hybrid propulsion systems. “Politicians have seen that emissions are a problem, but they have focused on removing those that come out of the exhaust pipe and do not take into account the entire life cycle. This emissions policy from the tank to the wheel would have to be changed to one from the well to the wheel, because electric cars also have their carbon footprint if the energy with which the batteries are charged is not of renewable origin, for example. It is true that in thermal engines the efficiencies in the use of energy are between 30 and 40% and in an electric car it can reach 80-90%, but to make a correct calculation you have to look at the whole process. Even when the energy is renewable, the efficiency of photovoltaic panels installed in Morocco is not the same as in Germany,” García points out.
And there are alternatives to maintain current engines and reduce emissions, says the UPV researcher: alternative fuels such as methanol or ammonia, which are already being tested because they do not generate CO2 emissions. Today, The EU has a timetable for being able to refuel with biofuels made from waste, for example in car tanks, but “currently what you fill up at a gas station is 100% fossil, except for B7, which includes 7% biofuel, and E5, which has 5% ethanol. The EU establishes a schedule for these percentages to grow and it is a very good policy, but if the bulk of the investments go to electrification, these alternatives cannot be developed. Generating a technological change and using fuels with fewer emissions in thermal engines is feasible, but at the cost level it has to be scalable and the user has to pay 2 euros per liter as they are paying now at the gas station,” says García.