ACEA calls on EU to ensure the future competitiveness of the automotive sector
The European Automobile Manufacturers’ Association has called on EU leaders to ensure the future competitiveness of the automotive sector and to drive decarbonization, it said Jan. 17.
Newly appointed ACEA President Ola Kallenius, who is also CEO of Mercedes-Benz, sent a letter to the European Commission, outlining three critical priorities to ensure the future competitiveness of the automotive sector and to drive decarbonization amid slow electric vehicle sales and rising trade tensions.
He said the first priority was a realistic market-driven pathway to decarbonizing the industry, one that was not penalty driven, and to find a solution to the disproportionate costs of compliance with the 2025 CO2 target for cars and vans.
The second priority was to implement recommendations of the Draghi report, including creating a regulatory framework that enhanced the competitiveness of the European industries.
Finally, Kallenius said promoting new approaches to create worldwide, mutually beneficial trade relations was a priority for the EU to continue benefiting from free and fair trade.
"A thriving European automotive industry is essential for driving economic growth and competitiveness," ACEA said, adding that the industry faces unprecedented challenges from global competition, geopolitical tensions, and a more complex than anticipated transformation towards zero-emission mobility.
It said the most urgent action that the industry needs now is that the EU finds a solution for compliance burden relief for cars and vans on the 2025 CO2 target.
"The European Green Deal must be subject to a reality check and a realignment -- to make it less rigid, more flexible and to turn the decarbonization of the automotive industry into a green and profitable business model," Kallenius said.
"Let me be clear: the EU auto industry remains committed to the EU’s 2050 climate neutrality goal as well as the shift to zero-emission transport and mobility," he added.
According to the letter, political action now was critical, as the latest provisional figures indicated an almost 6% decline in new EV registrations in 2024 and market share down 1% to 13.6%, while a sharp increase was required to meet stringent CO2 targets in the coming years.
"The European Green Deal must be subject to a reality check and a realignment -- to make it less rigid, more flexible and to turn the decarbonisation of the automotive industry into a green and profitable business model," ACEA said.
ACEA is due to release its 2024 vehicle sales data on Jan. 21. Recently released data from individual countries showed the EU’s largest car market, Germany’s, passenger EV sales fell 18% year over year to 572,700 units in 2024, while Spain's EV sales slipped 0.4% to 125,000 units.
Meanwhile, responding to news reports that Chinese automakers were possibly interested in taking over some German auto factories planned for closure, particularly Volkswagen's plants, Andy Palmer, Founder Palmer Energy and EVUK advisory board member, said in a UKEV statement this was smart continuity planning by Chinese automakers.
"We know that for this generation of batteries and EVs the Chinese have cut a lead, a strong one, through smart business planning. Rather than view them as the enemy, we should, as Germany could be about to and Spain is actively pursuing, look at ways to collaborate and drive business and employment on our own shores," he said.
In October, VW General Works Council told S&P Global Commodity Insights that VW could close up to three plants in Germany and possibly reduce operations at others.
In 2024, VW delivered 4.8 million units globally in 2024, down 1.4% year over year.
UKEV CEO Dan Caesar added that the biggest beneficiaries of the switch to battery EVs would be Chinese and Korean automakers, therefore, the opportunity for the UK to encourage Asian OEMs to manufacture cars here -- Europe’s biggest EV market -- should be a no-brainer."
Quentin Willson, founder of FairCharge and EVUK advisory board member, said that realistically the UK would not build many battery gigafactories.
"The fact that government has only earmarked a few billion shows how little they understand about the costs of building EV batteries at scale. The Chinese have a ten-year advantage over Europe in the sector so there’s opportunity to onshore their technology here," he said.
Platts, part of S&P Global Commodity Insights, assessed battery grade lithium carbonate at $10,200/mt and hydroxide at $9,700/mt CIF Europe on Jan. 16, 2025, down 35% and 39% respectively since the start of 2024.