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On October 8th, during the plenary session of the European Parliament, Commission Vice-President Valdis Dombrovskis strenuously defended the EU’s objectives in relation to the car market and, in particular, to the subject of electric cars. The Vice-President has no intention of deviating from the goal dictated by the European Union’s Green Deal, namely to achieve a 100 per cent rate of zero-emission cars by 2035.
THE ITALIAN PROPOSAL
In recent weeks, the debate on the 2035 target has returned to the attention – and the agenda – of the European Union and the member states, due in part to the initiative taken by the Italian Minister for Enterprise and Made in Italy, Adolfo Urso, asking that the review of the target, initially scheduled for 2026, be brought forward to 2025, so as to align environmental policy with industrial policy. The latter, in fact, is unlikely to find in such tight targets promoted by the European Union an opportunity for development and growth, which is what the European economy and member states need most. In this sense, the Italian proposal put forward at the recent Competitiveness Council did not have the hoped-for effects, with many of the member states still focused on pursuing the objectives set by Brussels in a more ideological than realistic manner, without looking at the reality of facts and at the market.
NO ROOM FOR NEGOTIATION
Room for negotiation on the Italian proposal seems to have been definitively shut down by Commission Vice-President Valdis Dombrovskis. While defending the objectives of the European Green Deal at the plenary session of the European Parliament, he emphasised that the automotive industry would have time to adapt its structures to this change, which, although epochal, has precise and known steps and objectives. According to Dombrovskis, it is a simple and clear framework of rules to be adhered to in order to generate the security that should lead the automotive industry to comply with steps and objectives. Still in plenary, however, the Commission vice-president added that an acceleration is needed, again in stark contrast with the Italian proposal to review (one year in advance and, therefore, in 2025) the 2035 targets and, in general, the EU Green Deal. Indeed, Dombrovskis spoke of the need to redouble efforts to ensure that the electrification path remains viable and widely accepted by the member states. For Brussels, therefore, this transition to 100 per cent zero-emission cars remains a huge opportunity for the European car market and industry, even though – as the Commission Vice-President admits – it entails several challenges. An interesting example of these challenges, mentioned by Dombrovskis in the plenary session of the Euro parliament and also taken up by the international press, concerns the presence and distribution of recharging stations: an essential element for the spread of this type of car. The Vice-President of the Commission admitted that the distribution of these recharging stations within the European Union is currently not uniform and called for a better implementation and distribution of the recharging network, which is necessary to support the increase in electric cars envisaged in the objectives of the European Green Deal. Of course, this statement does not take into consideration the economic and technical complexity of this operation, especially in the more marginal areas of the European Union and the less infrastructurally developed regions of the member states. Difficulties and dissimilarities can, in fact, occur between different regions of the same state, as well as between large cities and rural areas, to the point of registering large gaps between central districts and the periphery of a metropolis. The figure cited by Dombrovskis himself is clear and gives a sense of what the impact of this phenomenon could be – should the statistics be supported by actual market data. Indeed, the Vice-President pointed out that, according to the International Energy Agency, one in five cars sold in 2024 will be electrically powered. A forecast that cannot fail to reckon with the energy distribution network and recharging stations that, as of today, would in any case not be able to meet such a demand. Even considering criticalities and challenges, therefore, for the Brussels executive the Italian proposal is not acceptable, and the targets (with their timeline) are untouchable. Once again, the ideological perspective does not come to terms with the reality of the facts or the crisis in sales of the automotive sector, for example. To the demands of the industry, in fact, the Union institutions seem to have no response other than to say that the framework of rules and objectives created has given the necessary time to create and plan a fair transition, and that therefore there will be no going backwards. This is a rather short-sighted perspective, which does not take into account economic and international vicissitudes, including the current crisis landscape with the war in Ukraine and the escalation in the Middle East.
THE MARKET’S PROBLEMS
However, one has to consider what the market thinks of the European targets, especially in relation to the 2035 deadline and the intermediate steps that could weigh heavily (in terms of penalties) on the coffers and economic forecasts of the major car manufacturers. As of today, the European industry is already expecting to have to pay several billion in penalties. In particular, there is talk of around 13 billion for cars and 3 billion for vans. All because of the failure to meet the targets imposed by the European green policies that are set to be triggered as early as next year. The European Union’s fines starting in 2025, in fact, will hit manufacturers who exceed 95 g/km of CO2 as an average for their fleet. Naturally, the market is not homogeneous, just as different car manufacturers are responding differently to this epoch-making change in production. The various brands have different yields and therefore also different approaches. It remains clear, however, that the automotive industry is not sailing in calm waters, especially in relation to sales, emission reduction targets and competition mainly from imports from the Asian continent. Suffice it to say that in the past few days it was the European Stellantis dealers who appealed to Ursula von der Leyen, especially regarding the difficulties in selling electric vehicles in the EU market. Among the demands brought forward by the dealers is the postponement to 2027 of the entry into force of the new limits imposed by the European Union’s Green Deal on emissions, which are currently set and will begin to produce penalties as early as 2025. Dealers complain that European consumers are refusing to buy electric cars because of concerns in terms of price, range and recharging accessibility. This position is in contrast with, for example, the manufacturer Stellantis, which is optimistic about the market share to be achieved in relation to EU targets. A situation of disagreement and divergence that creates quite a few problems for a market that, in any case, does not seem ready to accept the volume of electric cars required by the European Green Deal. At this point, the dealers’ demands – which differ not by much from those of the Italian government – do not seem so far removed from the necessary realism that is needed to manage this transition, far from blind ideology. Moreover, the rift between manufacturers and dealer networks does not seem to be a good sign either. It seems as if the institutions and the highest levels of the industry and the market no longer have their finger on the pulse of the situation; the hope is that the voices coming from below will at least be heard.