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huge fines are like a sword hanging over your head. european car companies call on the eu to urgently adjust the new emission regulations

2024-09-20

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on thursday (september 19th) local time, the european automobile manufacturers association (acea) stated on its official website that as the eu's stricter carbon emissions standards come into effect next year, manufacturers will face billions of euros in fines and the prospect of large-scale production cuts.

source: acea official website

data released by acea on the same day showed that new car sales in the eu fell 18.3% in august, falling to the lowest level in three years. among them, sales in major markets such as germany (-27.8%), france (-24.3%) and italy (-13.4%) all experienced double-digit declines.

the data also showed that in august, european pure electric vehicle sales fell 43.9% year-on-year, marking the fourth consecutive month of decline, and plug-in electric vehicle registrations also fell 22.3%. in terms of share, electric vehicles now account for 14.4% of the automotive market, down from 21% in the same period last year.

acea wrote in a statement that the registration data reaffirmed that the electric vehicle market was on a continuing downward trajectory, calling for an "urgent review" of eu emissions rules due to take effect in 2025 and a ban on the sale of new combustion engine cars in 2035.

acea's board said automakers face billions of euros in fines or unnecessary production cuts, layoffs and weakening of european supply and value chains in the face of fierce competition. the agency explained:

we lack the key conditions necessary for zero-emission vehicle production and adoption: charging and refueling infrastructure, a competitive manufacturing environment, affordable green energy, purchasing and tax incentives, and secure supplies of raw materials, hydrogen, and batteries. economic growth, consumer acceptance, and trust in infrastructure have also not yet fully developed.

the day before, italian prime minister meroni called the eu's ban on the sale of new combustion engine cars from 2035 a "self-destructive" policy. she warned that it could lead to "tens of thousands of jobs being destroyed or entire industrial sectors that create wealth and employment being dismantled."

her comments were echoed by politicians across the eu, with carmakers also saying they did not want to hinder the transition to cleaner vehicles but that a sharp drop in electric car sales was having a major impact on their production.

according to media reports, renault wrote in a draft document that if the market share of electric vehicles remains unchanged in 2025, all automakers will face a total fine of up to 13 billion euros due to the new rules.

the document states that eu carmakers need to have a market share of 20% to 22% to comply with the regulations, but that figure is currently stagnant at less than 15%, meaning they need to drastically cut production and sales of gasoline cars or face huge fines.

source: acea official website

acea director general sigrid de vries told the media, "you can see that a consensus is emerging. everyone recognizes the seriousness of the problem and needs to be solved as soon as possible. we are now seeing a very large impact in reality, which may have a serious impact in 2025."

de vries also mentioned that a major problem with eu rules is that they set thresholds for vehicle emissions but do not provide sufficient incentives for consumers to buy electric vehicles. "the eu's approach is structurally flawed, and mandatory regulations cannot create a market."

de vries added that “incentives are very important and can be financial or non-financial.” she pointed to the example of norway, which reduced parking fees for electric vehicles and allowed them to use bus lanes.

the european commission responded that it had received acea's letter and would respond in due course.