The European regulations that prohibit the manufacture of internal combustion engines in the year 2035 and that, until then, limit the emissions of new cars and subject manufacturers to heavy fines that can reach 16 billion euros are putting in serious difficulties for practically all European manufacturers of the automobile.
The policy of the European Parliament that wants to favor the electric car is leading many manufacturers to a dead end, since lThe demand for vehicles with this type of engine is not responding as Brussels officials had calculated.
While forecasts estimated that electric cars would have a market share in Europe of approximately one in every four cars sold at the end of the year that has just ended, the reality is that in all EU countries this proportion has only reached at 13%. And the situation is especially serious in some countries, such as in Spain, where pure electric registrations do not reach 5%.
The higher price of this type of automobile, the lack of sufficient charging infrastructurethe difficulty of using them, since you have to pay for electricity through applications on your mobile phone instead of cash or credit card used at gas stations, and the almost total depreciation of the vehicle after eight years of use They are the main barriers to the development of this market.
To try to help sales, some countries have established subsidies for the purchase of electric cars. It is the case of Plan Moves in Spain. But its operation is leaving much to be desired since payments take up to more than a year and a half to be collected from the date of purchase and, in addition, the amounts received must be declared in the personal income tax.
Two big mistakes that Anfacthe manufacturers’ association, has not stopped denouncing since its implementation, but which the Government does not correct. This is one of the reasons that led the previous president of the employers’ associationWayne Griffithsto resign before him failure to fulfill Sánchez’s promises. In some cases, such as in Germany, the cessation of aid has marked an immediate decline in electric sales in that country.
The year that begins will be marked by a new reduction in the level of emissions of the so-called CAFE regulations (Corporate Fuel Emissions Average), which lowers the limits by 20% until they are placed at 93.6 grams of CO2 per kilometer traveled. A goal that is very difficult to achieve for all European manufacturers, which can lead to fines that can sink their income statements if they do not meet the objectives.
The only solution is to sell cars with fewer emissions, such as electric ones, but the price is too important a brake. For this reason, it is being studied to raise the price of combustion cars to match the rates of electric cars or limit their sale to reduce emissions.
In Spain, for example, the sale of 175,000 units of cars that use fuels should be reduced petroleum derivatives. Either scenario goes to the waterline of the survival of European car factories.
With this panorama, Europe is risking the future of the motor industrywhich represents just over 7.5% of its GDP and approximately 10% of its direct jobs. Not counting the jobs generated by the auxiliary industry, component manufacturers, repair shops, dealerships in commercial networks and other related businesses.
This policy of the European Union parliamentarians has, on the other hand, left the automobile market in the hands of Chinese automotive companies, which are entering all countries with a multitude of brands and models. In addition to having more advanced electrical technology than the Europeans, their production costs are much lower and the aid they receive in their country of origin causes imbalances in competition compared to their European rivals. And the possible restrictions on imports that the Trump Administration may establish in the United States are another latent threat to Europe.
Depreciation in the stock market
This situation and what it means for the future of the automotive sector in Europe is causing investors not to bet on its viability in the short and medium term and the consequence is being a general decline in the value of shares of the main European automobile groups. If we compare the value of the shares from just six months ago with the prices at the end of last year, we see that, among the large ones, only Renault more or less holds the value at 47 euros, with a drop of only 2.49 %.
But the situation is much more worrying for other manufacturers. Although the values have recovered slightly in the month of December, the decreases in the last half of 2024 have been 32.4% for Stellantis, 22.7% for Ford, 16.9% for Mercedes Benz, 16.4% for Volkswagen, or 11.4% for BMW.
Even the most exclusive brands fall. Like Porsche, which has clearly opted for the electrification of its production and recorded a drop of 15.77%, while another brand in the same market niche, such as Ferrari, which continues to rely on combustion in most of its models, registers an increase in the same period of 7.90%.
In addition to financial setbacks, the European Union’s push for electrification is causing a drop in sales, whose levels are below the years before the pandemic. Specifically, in Spain approximately 25% fewer cars are registered than in 2019.
The consequence of this is that factories are far below their optimal production level and there are plenty of jobs. Added to this is the fact that since electrification is unthinkable in less developed territories, such as Africasome regions in Asia or South America, manufacturers will put their production centers there, thereby saving on labor and transportation costs.
Therefore, the consequences have not been long in coming. Volkswagen has announced the layoff of around 35,000 employees and the closure of its plant in Belgium while here in Martorell, Cupra production could be reduced to meet new emissions cuts. Ford, for its part, has announced a cut of 4,000 jobs.
Growing relocation to Morocco
The problems affect all European plants. Stellantis does not give viability to the English company from Luton because it is going to double its production at the Kenitra factory, in Morocco, where it has made an investment of 300 million to manufacture combustion cars and increase its production capacity to 400,000 units. Another brand that looks to the Maghreb country is Renault, which produces several Dacia models at the Mezzour facilities.
cars that They are then sold in Spain, like the Sandero, one of the best sellers. Meanwhile, the EU does not react and there is only talk of a possible review of the current restrictive regulations for 2026, despite the fact that all manufacturers have exposed the extreme situation to Brussels. Another year may be irreversible for the European motor sector.