https://r.sib.wedonthavetime.org/mk/mr/sh/7nVU0AFQsmyZIy1zfpBd2W4xvdIASfZ/_JlJtuqKxb38
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Image: European cars’ faltering sales in China (Source: Moneyweb). |
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| European carmakers are facing a crisis. Profits at industry giants like VW, BMW, and Mercedes have plunged—down as much as 80%—while competition from China’s booming electric vehicle market continues to grow. Adding to the pressure, stricter EU emissions limits are just around the corner.
In response, the largest political group in the EU Parliament is calling to repeal the EU’s 2035 ban on selling new petrol and diesel cars, arguing it will help the struggling auto industry. However, this approach risks undermining Europe’s green transition and further eroding its global competitiveness in the shift to electrification. Rolling back Europe’s climate action won’t solve the auto industry’s problems. Explore our in-depth analysis and watch insights from our COP29 China session to uncover the path forward |
https://app.wedonthavetime.org/posts/75b38fa7-6fa0-4af0-b3ba-d9bb98a99322
As European carmakers grapple with weak sales and shrinking profits, the largest political party in the EU, the European People’s Party (EPP), is pushing for a repeal of the upcoming ban on selling new petrol and diesel cars.
But is this the right response? Evidence suggests the solution lies in moving faster toward electrification, not slowing down.
A Challenging Year for European Automakers
2024 has been a particularly tough year for Europe’s car manufacturers. Volkswagen reported a 60% drop in third-quarter profits, while Mercedes and BMW saw declines of 65% and 80%, respectively. Beyond the financial slump, many automakers are struggling to retrofit their facilities for electric vehicle (EV) production and to comply with the stricter EU emissions standards set to take effect next year.
In light of these challenges, the EPP has proposed rolling back the EU’s 2035 ban on new fossil-fueled vehicles, citing economic pressures and concerns for jobs. However, this approach risks undermining Europe’s climate commitments and delaying the green transition, which is crucial for the long-term competitiveness of the auto industry.
Europe’s centre right pushes to reverse 2035 ban on petrol cars
European People’s party says law aimed at boosting electric vehicle production is misfiring
https://www.ft.com/content/61a769cc-478e-4935-9c22-10600710afd1#myft:my-news:page
The Risks of Backtracking
The auto industry is vital to the EU economy, employing 6% of its population. But halting progress toward electrification risks more than just emissions cuts—it could erode investor confidence, increase economic uncertainty, and leave Europe lagging behind in the global auto market. While the shift to EVs presents undeniable challenges, clinging to gasoline-powered cars is a short-term fix that prolongs inevitable disruption.
Global Trends: China’s EV Success as a Lesson
While Europe’s carmakers face turbulence, the global EV market continues to expand. China, the world’s largest and fastest-growing car market, now sees electric vehicles account for over half of new car sales. Just 15 years ago, EV sales in China were negligible. Today, thanks to early adoption of buyer incentives and government support, China produces and sells over 10 million EVs annually.
The struggles of European automakers can, in part, be attributed to their diminishing share in the Chinese market. European brands, once dominant, are losing ground as Chinese manufacturers deliver affordable and innovative EVs to eager buyers.
The 2035 Ban: A Signal for Progress
Europe’s proposed 2035 sales ban on new fossil-fueled cars sends a clear message to carmakers and investors: the future is electric. Repealing this ban may provide temporary relief but would only slow the transition, leaving Europe further from its climate goals and less competitive in the evolving auto industry.
The Case for Collaboration, Not Conflict
As Europe grapples with these changes, some argue for protectionist measures, such as tariffs on Chinese EV imports. But starting a trade war with China risks isolating European companies from critical global supply chains and innovation hubs.
“Protectionism breeds stagnation, while innovation thrives on collaboration,” writes UCLA Professor Christopher S. Tang. Instead of barriers, Europe should focus on partnerships that leverage China’s expertise in scaling EV production and combine it with Europe’s engineering innovation.
Ingmar Rentzhog, CEO of We Don’t Have Time, echoed this sentiment during a special session at the COP29 Climate Hub in Baku. “We should not penalize countries that are spending money to make green tech cheap,” Rentzhog said. Instead, collaboration with China could unlock new opportunities for technological breakthroughs, stabilize supply chains, and accelerate the electrification of transport globally.
Charting a Path Forward
The rapid growth of China’s EV market offers a clear roadmap for Europe’s transition. By fostering partnerships that combine the strengths of both regions, Europe can secure its place in a carbon-neutral future while stabilizing its auto industry during this period of transformation.
To succeed, Europe must embrace innovation, accelerate its green transition, and engage in global collaboration. This is not just about cars; it’s about creating a resilient, competitive, and sustainable economy that leads in the 21st century.
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