Last orders! The EU calls time on patent No. 37435

On January 29, 1886, Carl Benz applied for a petrol-powered vehicle patent, which effectively democratised personal mobility up until today. With around 90 million new light vehicles fitted with an internal combustion engine entering the world's roads each year, 149 years since its birth, time will finally be called on patent 37435 across Europe. Last month the European Union (EU) effectively gave obituary writers a publication deadline for the humble ICE. A de facto ban across the 27-country region is set to be enforced by 2035, and thanks to the EU's first-mover status, the slow death of Mr Benz's creation isn't likely to stop there.
In order to avoid a fine, 2034 will be the final year petrol or diesel CO2-burning cars (or vans) will be permitted to be sold across the EU, which records an average 13 million new passenger car sales annually (pre-COVID 2019).

Norway will end new ICE car sales in just over two years.

Following trialogue discussions, The European Council and European Parliament (EP) agreed – with just the formal adoption left – that new car fleet average sales must not exceed 0g/km CO2 by 2035.

A mid-term review in 2026 will assess if there has been any significant progress in terms of alternatives to electric or fuel-cell, such as PHEVs or synthetic fuels (e-fuels).

However, this appears to have been a gesture clause added to get sceptical France and Germany on board that could have torpedoed the legislation given their population weighting across the EU.

Both stand most to lose in terms of citizens employed in the industry, with battery-powered cars requiring far fewer parts and sending tremors through Germany’s “Mittelstand”, which have been vital in Germany’s automotive success.

Italy scored a small goal by getting an extension to the so-called derogation for low-volume manufacturers extended to the end of 2035, allowing brands such as Ferrari to achieve weaker fleet targets.

A consequence could be lower volume OEMs that have already announced ICE exits – Bentley 2030 – may now possibly delay that.

However, despite derogation targets, some OEMs are still finding it a struggle to comply. Latest European and UK data reveals that Jaguar Land Rover has been forced to pool with Tesla again in 2022 to meet their EU fleet targets.

The Tata-owned company told this study it is due to being “impacted by ongoing global semiconductor supply issues.”

So-called zero- and low-emission vehicle (ZLEV) regulatory incentive mechanisms will also be kept until 2030 in what can be seen as another win for Germany’s premium manufacturers, giving them more capacity to push highly profitable ICEs. The ZLEV mechanism means OEMs that achieve over 20% plug-in mix (was previously due to be 15%) of their fleet between 2025 and 2030 will be rewarded with a less stringent fleet average CO2 target to meet.

The benchmark fleet target in the half-decade from 2025 up to 2030, will be a 15% reduction over 2021 levels, so around 86 g/km (NEDC) or around 100g/km in WLTP.

 

The content of the final agreement between the Commission, EP and Council wasn’t the most surprising thing, though.

The speed in getting this through the labyrinth of European policymakers, representatives and lobbyists was.

The original proposal by the European Commission under its Fit For 55 package was revealed last year.

The key headline numbers of seeing a 55% CO2 emission reduction target for new cars by 2030 compared to 2021 levels (95g/km in the NECD cycle), which is an increase over the current target of seeing a -37.5g/km reduction during the same period and the 100% reduction by 2035 all remained in the final text.
The weaker-than-expected provisional Euro 7 legislation papers, leaked just weeks before the final CO2 fleet target, was likely another trigger in getting those European Council members onboard and getting this legislation passed.

Laxer exhaust gas regulations, than expected (announcement expected tomorrow), could theoretically enable incumbent OEMs more time to phase-out their current technology, allowing them to use those profits to fund the transition to EVs rather than more investments into developing more complex ICEs.

Stellantis’ CEO, Carlos Tavares told this report, on the fringes of the Automobilwoche industry summit in October, that he is livid with the “dogmatic legislation” coming out of Brussels and sees it as a golden ticket to Chinese OEMs that have been able to scale BEVs faster in their domestic market backed by generous government policies.

On the eve of the Paris Motor Show, France’s President, Macron, told Les Echos that Europeans should buy European, and was seen shunning Chinese manufacturers at the show a day later.

With Stellantis, Renault, and the French economy being one of the most exposed to the new Chinese entrants (see page 24), expect more protectionism-fighting talk.

Two graphs showing EV market data in Western Europe for September 2022. Left graph details Chinese BEV market share and volume by brand, highlighting a 51.9K YTD total. Right graph shows 12-month EV registration trends with an increasing 67.9K monthly average.
Last orders The EU calls time on patent No. 37435 | Schmidt Automotive Research

Get free access to the world’s largest EV Reports Database, Sales & Charging data, and so much more

Related news

Tesla’s popularity soars in 2024, yet Rivian emerges as the best-rated EV

Plug In America's 2024 EV Driver Annual Survey offers a comprehensive look at the electric vehicle…

read more
Electric Vehicles
Americas
Published by: Editorial board | October 11, 2024

Tesla's supercharger network outpaces competitors in public fast and ultra-fast charging

Tesla has solidified its position as the leading provider of public fast and ultra-fast charging stations…

read more
EV Charging
Global
Published by: Editorial board | October 10, 2024

Lithium-ion batteries are getting cheaper as supply outpaces demand

The price of lithium-ion batteries, the essential power source behind electric vehicles (EVs) and renewable energy…

read more
Batteries
Global
Published by: Editorial board | October 8, 2024

Electric Vehicle sales forecast to hit 30 million by 2027 as global adoption accelerates

Electric vehicles (EVs) are becoming a major force in the global automotive market. According to BloombergNEF…

read more
Electric Vehicles
Global
Published by: Editorial board | October 7, 2024