Luca de MeoCEO of the Renault Group and President of ACEA (Association of European Automobile Manufacturers), sounded the alarm about risks of loss of competitiveness of the European automotive industry at this stage of transformation with the advent of electrification. For this reason, as president of ACEA, made an appeal to European politiciansdemanding the development of an ambitious plan that will enable the European automotive industry to remain competitive in the future.
Our industry has long had a competitive edge in the value chain of combustion engine vehicles. This will no longer be the case for electric vehicles, at least in the short term. Our competitors have a lot of cards in their hands that we don’t have yet, i.e. ahead of the battery electric vehicle supply chain. In addition, their support from national and local authorities has been enormous and continues to grow in China and the United States.
The problems noted by Luca de Meo are many. The first one political support. The Italian manager takes, for example,Inflation Reduction Act (IRA) which we have talked about several times. This is a United States government initiative to stimulate local industry at this moment of transformation.
Indeed, with the Inflation Reduction Act (IRA), we see the United States pushing its industry towards a green transition, while the European approach is to regulate the sector, often in an unsynchronized way.
Luca de Meo then points his finger at the new Euro 7 legislation, which imposes unrealistic restrictions on car manufacturers and will lead to cost increase (about 1000 euros per machine for manufacturers, twice as much for consumers). Rising prices for new cars may deter people from buying them. It would also mean slow down the generational change. Thus, the fleet of vehicles will become older and more polluting. De Meo estimates the market will fall by about 7%. A fall that could cause car manufacturers to close some factories.
Euro 7 compliance will increase costs, which could discourage customers from buying these new vehicles. This can extend the life of cars: meaning that older cars with higher emissions stay on the roads longer.
Luca de Meo believes that big benefits would be obtained if the investments needed to adapt cars to the Euro 7 standard were switch to electrificationto make these cars more affordable. It’s a concept that several automakers have already voiced in the past when talking about new emissions regulations.
We argue that we could achieve much greater economic efficiency if we redirected the huge investments required for Euro 7 towards electrification, making electric vehicles more affordable and developing zero-emission technologies to improve the fleet.
Thus, in connection with the presentation Industry Green Deal Plan in what can be seen as a response to the US Inflation Reduction Act (IRA), Luca de Meo, as president of ACEA, is calling on European politicians to prepare an ambitious plan to support the Old Continent’s auto industry.
Indeed, ACEA believes that the Green Deal Sector Plan, if successfully implemented, could be the first step towards preserving investment in the European Union and protecting free trade worldwide. The industry also hopes that Critical Raw Materials Act this will improve domestic capacity to extract, process and process raw materials, as well as increase the reliability of supply. Otherwise, car manufacturers in the EU will continue to be at a significant disadvantage compared to their counterparts in other regions.
Finally, ACEA shared their forecast for the automotive sector in 2023.
Despite many uncertainties going forward, the market is expected to begin a recovery process in 2023. We expect about 9.8 million new vehicles to be sold in the region this year, up 5% from 2022. However, this remains 25% lower. pre-crisis levels of 2019, indicating that we are still in an unstable situation. In this context, it is all the more important for our industry to strengthen its position on the world stage.
Source: HD Motori
Ashley Fitzgerald is an accomplished journalist in the field of technology. She currently works as a writer at 24 news breaker. With a deep understanding of the latest technology developments, Ashley’s writing provides readers with insightful analysis and unique perspectives on the industry.