Say it isn’t so: BMW, Volkswagen and Renault focus on phasing out Europe’s ICE ban

The leaders of BMW, Volkswagen and Renault have spoken out against the European Union’s emissions targets in recent days, arguing that the phase-out rules are putting too much pressure on the industry and that consumers are not buying electric vehicles fast enough. The policy will be tightened next year ahead of a complete ban on petrol and diesel cars in 2035, forcing carmakers to pay hefty fines if they fall short.

By 2025, the EU will require emissions from new passenger cars sold in Europe to be cut by 25%, compared to 2021 figures – and older carmakers aren’t happy about that, arguing that basing their entire industry on the vagaries of consumer desires. or not) to buy electric vehicles is not fair.

Failure to comply with the new rules will come with a price: a fine of €95 ($102) for each vehicle registered in the EU, multiplied annually by each CO2 g/km above the target.

“We believe that a comprehensive review of CO2 fleet legislation in the EU is essential,” BMW CEO Oliver Zipse said yesterday, as reported in Automotive News Europe.

Interestingly, BMW has already said it has reduced its own CO2 emissions fleet to an average of 20% below the European 2023 target. Zipse also said the company is on track to meet 2025 targets too – last year it was 15% of BMW BEV sales, with a target of 20% by 2025. The company estimated global BEV sales of 50% by 2030, and possibly higher in Europe, he said.

Still, Zipse urges the EU to reduce pressure. “By the end of 2025, the world will find that it’s not that simple,” he added, speaking at the automaker’s annual results conference. “By then, the pressure will be significant for the European car industry.”

“Something that is not taken into account is that it is the free decision of millions of customers,” Zipse said. “It’s not just like energy infrastructure where you can turn something off and then something else automatically happens.”

Last week, Volkswagen Group CEO Oliver Blume said: “There is no point in the industry having to pay fines if the preconditions for the ramp-up of electric cars are not in place.” Renault CEO Luca de Meo also joined in this week, asking for a call for a review in an open letter to EU lawmakers published this week.

Electrek’s Take

It should come as no surprise that automakers are talking out of both sides of their mouths here. And the 2035 ban on ICE cars faces serious challenges ahead of June’s European elections, as momentum for overturning the ban grows, and lawmakers who take office after the election could easily water down the policy.

As for carmakers, ACEA, the European carmakers association, led by De Meo, said last month that it is not backing down and is fully committed to the EV future, with De Meo adding that the car industry does not want to play any role in the discussion “against the scheme.” “We are not disputing 2035,” De Meo said. “Now we have to get started.” He added that the upcoming 2035 ban target is “potentially achievable, but the right conditions must be met.”

These conditions usually mean that consumers are choosing European cars over Chinese ones, as European carmakers face enormous pressure from cheaper, high-end Chinese brands arriving by the boatload. Automakers have been pushing for more government incentives and investment in charging infrastructure to help increase EV adoption. 2024 saw an end, or radical reduction, of many EU stimulus programs. Creative solutions are certainly on the table: Volkswagen and Renault are jointly negotiating the development of an EV for less than €20,000.

De Meo also argued that European carmakers are under pressure from all sides, with the need to invest in new technologies and retrain the workforce to avoid mass layoffs, and to control the price of raw materials such as lithium. “China governs, the US incentivizes and Europe regulates,” he wrote in the public letter, which also called for a 10-year “Marshall Plan” fund that could replace older cars with newer, cleaner ones, while spreading the funds across Europe would be redistributed according to each capacity of the country. He said this plan could save 1 million tons of CO2 by the end of the decade Automotive News Europe.

Last year, the EU agreed to water down a European Commission ruling on Euro 7 vehicle emissions, after major opposition from carmakers and eight countries, including France, which put forward the argument that the changes would jeopardize investment from electric vehicles could be distracting.

Just like in the US, the European Union is facing a volatile election year. In any case, the EU has said that it will reassess its CO2 policy in 2026 to see how things are going. If the policy weathers the storm this year, European carmakers could still produce combustion engines even after 2035, as long as they are exported and sold outside the EU.

Photo: BMW

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