Promises, but no plans

The electric car market in Europe continues to grow fast. In Europe, electric car sales have gone up from 3.0% in 2019, to 10.5% in 2020. Not even a worldwide pandemic has been able to halt carmakers’ ambitions to comply with the new European car CO₂ standard, that has taken effect in 2020. However, the question is whether the EU is shaping the right conditions for the timely transition to an all-electric future.
According to the report ‘Promises, but no plans’ by Transport & Environment, the electric vehicle outlook is clear: in 2030, more than half of the car production in the European Union will be taken up by EV’s. In other words: car OEM’s are focusing all their efforts on electric mobility.

Source: Promises but no plans | Transport & Environment

Carmakers’ production plans and voluntary commitments tell us that the expected percentage of EV sales in 2025 will reach 26%. In 2027 this number will be 38% and in 2030 57%. This shows that the level of ambition of the current EU targets is not in line with what the industry plans to deliver. To reach a prognosed CO₂ reduction of 70% in 2030, carmakers should face regulatory action to make sure they deliver on their promises.

When comparing the current plans of carmakers with the current targets, it is clear that the car industry could – and maybe should – aim higher. If not, the ambitions of the European Green Deal will not be realised.

Source: Promises but no plans | Transport & Environment

EV’s lead the way

Not hydrogen, gas, nor PHEV’s are going to deliver on the decarbonization of passenger cars, EV’s are. This should be recognised by the EU, especially since the EV market outlook is that in 2027 EV’s will become cheaper to produce than petrol cars. Battery prices dropping and carmakers setting up dedicated production lines are two of the main reasons for this development. 

The direction we – not just consumers and the climate, but also carmakers – are travelling in, is electric. Therefore, the EU should take another look at its car CO₂ standards and adjust them to be in line with the potential of the rising EV industry.

Source: Promises but no plans | Transport & Environment

Setting new targets

Not only should the EU look at increasing the 2030 target, but also the targets for 2025 and 2027, for the following reasons:

  • Weakening regulatory flexibilities could cause the minimum required effective CO₂ reduction target to be as low as 2%-6% from 2025 to 2027. As a consequence, electric car sales could stagnate at today’s levels up to the end of the decade.
  • Higher EV volumes in this decade ensure lower production costs, economies of scale and thus more affordable electric cars.
  • A target as low as 50% CO₂ reduction in 2030 could delay the transition to EV’s.

Falling short

Setting weak targets means carmakers prioritise PHEV sales over EV sales. This suppresses the sales of electric cars with 10-20% and replaces their high EV production plans by sub-optimal PHEV strategies. The 50% target does not only fall short of current voluntary targets from the industry, but it would also delay the transition to electric mobility.

In short, failing to set a more ambitious target will not only bring delays, it might even mean the global demise of the transition to an electric automotive industry. Voluntary targets are not set in stone. For that reason the industry needs guarantees and guidance. Now, any type of setback could spur carmakers to change their plans.

Any forecast or outlook contains uncertainty. By setting the ambitions for the direction of travel in the EU regulations, the whole automotive industry – from battery producers, to grid and charging operators – will be able to effectively plan their transition.

Unique opportunity

By revising the EU car CO₂ targets, the European automotive industry has a unique opportunity to lead the way globally when it comes to the decarbonisation of the EU passenger car sector. It also offers the opportunity to show industrial leadership in the transition of a large part of our economy and workforce.

Weak industrial transition plans and voluntary industrial commitments are simply not enough to reach climate neutrality in 2050: the ultimate goal set in the European Green Deal. The transition to a full-electric future for Europe will not be easy, but with strong political action it can be realised.

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