Lack of supply is not what hinders the European car market. Imposing penalties would be wrong, as the manufacturers are doing their job. That is what Sigrid de Vries, Director General of European Automobile Manufacturers Association, wants the European Commission to acknowledge.
When the strategic talks about the future of European automobile manufacturing begin on Thursday, the industry wants to be the adult in the room. That is a key takeaway of what Sigrid de Vries, a high-ranking representative of the carmakers‘ association, had to say during a newly launched podcast EU Perspectives on Tuesday.
Ms de Vries was vocal in emphasizing the necessity to make compromises as part of consensual decision-making on the European Union level. Just as evident, however, was her determination not to let the automotive industry be scapegoated for the undesirable development in the field (which made the European Commission announce the strategic talks in the first place).
A competitive framework
When asked about the most pressing problems facing European automobile manufacturers today, Ms de Vries had her answer ready. “The lack of European competitiveness in order to manufacture profitably and affordably, to secure jobs, to make the transition to electromobility, and to keep Europe mobile. We need to have a more competitive framework,“ she exhorted.
Examples abound. “One of our members says that one out of three of his engineers is actually working on implementing regulation, not on innovation, not on making cars nicer, better, more attractive for people to buy,“ Ms de Vries said. “So we need to change something because it is a crucial differentiator. When you look at the US or China, you will see more incentives, a more innovation-oriented environment, and actually lower costs of manufacturing.“
Not too black-and-white
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When it comes to what such a change might entail, the devil is often in the detail. One of such neuralgic points for the carmaking industry are the new emission limits that could result in stiff penalties on companies failing to comply with them.
Asked about her opinion on the 2035 ban on selling new cars with combustion engines, Ms de Vries triangulated. “Well, we believe it’s maybe not the right question to ask now. We want this transformation to work realistically. It is important to keep the foot on the accelerator of this transformation. So if we now lose ourselves in a black-and-white discussion on whether there should be a ban or not, we believe that doesn’t help us in the actual transition.“
For all her acceptance of the necessity to transform the industry, there are red lines Ms de Vries does not want to cross. “We need to remain in fact technology open. That has been the standing position of the automotive industry in Europe, and we stay firm behind that,“ she said.
Asked about specific demands the association may make during the strategic talks, Ms de Vries played her cards rather close to the chest. „Our immediate focus is now on the passenger car side, on compliance penalties relief in 2025 because of a market failure,“ she said.
The recycling conundrum
Ms de Vries also mentioned the delicate matter of recycling in car manufacturing. A topic currently discussed in the European Parliament. „The car already is one of the most recycled products in the EU today. So we are talking about making those last steps with recycled content where you run into quality issues or reusability issues that indeed need to be looked at very carefully.“
Other participants of the EU Perspectives podcast also felt strongly about the recycled contents. Ondřej Krutílek MEP, automotive expert for the conservative faction ECR, warned against too strict compliance requirements. „There is a risk that at the end of the day, European manufacturers will not be able to produce cars if the recycled content will be too pricey. The current compliance requirements on recycled material are very high.“
Jens Gieseke MEP, chief negotiator for the EPP in the coming strategic talk, mentioned yet another issue of the current market, tradable emission permits. “One of our problems is that our competitors are heavily subsidised, for example in China. And now, our (tradable emission permit) solution is – OK, you avoid the penalty by giving your competitor additional money. This is something I can never defend.“
