Rebooting the auto industry while bolstering Europe’s climate ambitions

Almost 700 people tuned in last week, as we livestreamed a debate on how to find the right pathway to a strong and green recovery for the EU auto sector. Automotive CEOs and leading policy makers from across Europe came together for this online conference hosted by ACEA.

Message from ACEA's Director General – October 2020

As you know, in recent months ACEA has regularly called on EU policy makers and national governments to step up support to the auto industry, as our entire ecosystem continues to grapple with the fallout of COVID-19, while already at a critical juncture on the road to carbon neutrality. Although some national support measures have come to fruition, the auto sector still waits for major action at EU level.

In this context, I believe it is essential to have open reflections between industry and policy makers, as both sides share similar concerns. Policy makers and industry leaders also bear a joint responsibility for the strong and green recovery of the auto sector, especially with the long-term good of the European economy in mind.

That is exactly why we held the ‘Putting the EU auto industry back on track post-COVID’ conference on 20 October. It was a timely event because, as the latest figures confirm, COVID-19 has rocked the EU auto industry; leading to production losses of more than 4 million vehicles to date, with a total value of €122 billion.

In his opening remarks, Michael Manley, CEO of Fiat Chrysler Automobiles and ACEA President, cut right to the chase: “The COVID pandemic is clearly the biggest single risk ever to face the auto industry. It is adding massive pressures on our sector at a time when it is navigating fundamental technological shifts, as well as the prospect of a no-deal Brexit.”

The ACEA President stressed that the auto industry is committed to keeping a strong focus on the climate challenge. However, the European Commission’s recently-announced 2030 Climate Plan will require massive additional investments that will weigh disproportionately heavily on automobile manufacturers at a very difficult time.

Michael Manley: “Our investments alone will never be enough. If we want zero-emission mobility to become a real option for all Europeans, we need a vast network of charging points and re-fuelling stations right across the EU, coupled with economically-sustainable incentives.” To that end, support from national COVID recovery plans should be channelled into rebooting the auto sector.

“The EU recovery plan should be translated into concrete support measures, such as fleet renewal schemes to stimulate demand for low- and zero-emission cars and trucks. Let us not forget that a strong recovery of the automotive industry will lift the entire economy,” Manley argued.

Henrik Henriksson, CEO of Scania Group and Chairman of ACEA’s Commercial Vehicle Board, told the nearly 700 participants that Europe’s truck manufacturers are fully committed to achieving carbon-neutral road freight transport by 2050. Henriksson acknowledged that this will require radical changes from truck makers and the transport system at large, but univocally confirmed that the industry is ready to lead the transformation.

However, the Chairman did point out that while manufacturers of commercial vehicles have been making huge investments to put many zero-emission trucks on the market in the next few years, governments have not yet followed suit. Henriksson: “What we need member states to do now is to match our level of commitment by rolling out a network of truck-suitable charging stations.”

According to the Swedish CEO, a policy framework needs to be introduced by the EU and national governments that makes low- and zero-emission trucks the preferred option for transport operators. Only then can we “make this a success and turn the monumental challenges we are facing today into new opportunities,” Henrik Henriksson concluded.

Two other panellists joined Henriksson to debate what exactly is needed to reboot the EU auto industry after COVID-19. Diederik Samsom, who is Head of Cabinet for Frans Timmermans, the First Vice-President of the European Commission in charge of the European Green Deal, shared the views of the Commission while Colin Couchman of IHS Markit Automotive made sure the debate was grounded in the latest market facts and forecasts.

This resulted in a very animated 45-minute discussion which I strongly encourage you to watch here. I’d like to take this opportunity thank Henrik, Diederik and Colin once more for a really good debate, which gave us all plenty of food for thought.

Mr Samsom, for example, argued that “the COVID-19 crisis created a perfect storm, in a positive sense, to make the transition [to carbon neutrality] happen right now.” “Taxpayers’ money and EU policies will have to be aligned with the investments and ambitions of the auto industry,” Timmermans’ Head of Cabinet said. Couchman, on the other hand, warned that policy makers should keep mobility affordable for all Europeans: “We are going through a very dramatic period of economic decline, leaving many consumers around Europe much poorer than they would have been.”

Finally, we learned about the priorities of the German EU Presidency from Peter Altmaier, who is Germany’s Federal Minister for Economic Affairs and Energy. Mr Altmaier confirmed that both Germany and Europe are determined to support the auto industry in these difficult times. He referred to some of the recently-introduced support measures as “historic”, citing the example of several countries temporarily reducing VAT rates on vehicles in order to stimulate demand.

Altmaier added: “In order to secure growth and employment, however, we need to look beyond tackling the COVID-19 crisis. I want to make sure that Europe continues to be a strong base for the automotive industry and will be a leading international market for the mobility sector of the future.”

The Minister mentioned ongoing efforts to bring largescale battery-cell production to Europe, with a view to making sure that the EU accounts for 30% of global battery production in the future. Likewise, he stressed that the further expansion of charging infrastructure across Europe is equally important in this respect.

Looking back at last week’s successful online conference, I think Mr Altmaier summed up pretty well what is at stake right now when he said that our sector is “an indispensable link in Europe’s industrial value chain that we have to preserve for the future”. He also rightly pointed out that Europe’s auto industry has to face the COVID crisis while already at a critical juncture on the road to carbon neutrality and digitalisation, which further complicates things.

Of course, ACEA recognises the efforts made so far to use national recovery plans to support the industry, particularly when it comes to stimulating demand for low- and zero-emission cars, vans, trucks and buses. But like Mr Altmaier said, these are just “first steps”. More will need to come, especially from the EU side.

Indeed, industry and policy makers must work together to ensure that the EU automotive ecosystem – which employs more than 14.6 million Europeans – can survive, recover and prosper.

We will need sustained and strong commitment from EU and national policy makers, so that together we can ensure that our industry bounces back in green way. This will not only boost Europe’s economic recovery, but also its climate ambitions.

Eric-Mark Huitema
Director General of ACEA

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