European automakers are grappling with the challenges of transitioning to electric vehicles (EVs) by the European Union’s 2035 deadline, with Renault CEO Luca De Meo leading calls for more flexibility in the timeline. De Meo, who also heads the European Automobile Manufacturers Association (ACEA), emphasized that while abandoning the 100% EV goal would be a strategic mistake, the industry needs more time and cost reductions to meet the target.”We are not yet on the right trajectory to achieve this goal,” De Meo stated, highlighting the need for cost reductions to make EVs more competitive. The automotive sector faces multiple challenges, including regulatory uncertainty, intensifying competition from China, and a cost-of-living crisis in domestic markets, all of which are impacting the transition to EVs.While European automakers struggle, Chinese EV manufacturers are seizing the opportunity to expand into the European market. Zeekr, a Chinese automaker, is considering local production in Europe to circumvent the EU’s recently imposed tariffs on Chinese-made EVs. This move comes as the EU has implemented provisional duties of up to 37.6% on Chinese EVs, prompting concerns among Chinese manufacturers like SAIC Motor.The European car market has seen mixed results, with new car registrations increasing by 4.3% in June 2024, reaching their highest level since July 2019. However, EV sales have decelerated, with registrations of battery electric cars falling marginally. This slowdown is particularly challenging for German automakers, with Mercedes-Benz reporting a 16% drop in overall sales, partly due to sluggish demand for its electric models.As the industry navigates these challenges, the EU’s decision on EV tariffs and the ability of automakers to reduce costs and increase market readiness will play crucial roles in shaping the future of Europe’s automotive landscape.
Key points
- Renault CEO Luca De Meo calls for flexibility in the EU’s 2035 EV transition timeline, citing cost and market readiness concerns.
- European automakers face challenges in transitioning to EVs, including regulatory uncertainty and competition from China.
- Chinese EV manufacturers like Zeekr are planning to produce locally in Europe to avoid EU tariffs.
- The European car market shows mixed results, with overall sales increasing but EV sales decelerating.
Contradictions👾While new car registrations in Europe have increased, reaching their highest level since July 2019, EV sales have decelerated, with registrations of battery electric cars falling marginally.
