A battle has broken out in Germany’s car industry between manufacturers and suppliers over whether and how to save the internal combustion engine.
The industry’s lobby VDA last week published a ten-point plan that reads like a recipe to prolong combustion-engine car production – calling for a reduction of the zero-CO2 emissions standard for new cars in 2035 (which effectively constitutes a ban) to a 90% emissions reduction, alongside a raft of delayed phase-ins and exemptions.
Euractiv canvassed various players in Germany’s automotive sector, and found not even all VDA members are wholeheartedly behind the plan, or prepared to take a public position.
Germany’s biggest automotive suppliers – Bosch, ZF, Schaeffler, and Mahle – said they supported the call. Others, including battery manufacturer Exide, semiconductor firm Infineon and tyremaker Continental, declined to comment.
Meanwhile, Germany’s ‘Big Three’ carmakers – BMW, Mercedes-Benz and Volkswagen –remain cautious about openly backing efforts to delay or limit the combustion engine phase-out.
BMW, the only one still determined to keep fossil-fuelled cars in its portfolio in the years to come, welcomed the VDA paper as a “strong strategic signal that clearly identifies the political fields of action.”
Mercedes-Benz and Volkswagen, however, underlined their commitment to electromobility. Their responses stopped short of fully endorsing the plan, instead calling for “a discussion on the path to decarbonisation in the EU that reflects reality” and “a regular review and realistic adaptation to market developments,” respectively.
Sources familiar with the company told Euractiv that Volkswagen does not support delaying the 2035 net-zero target.
Only if money is no object
Given the lack of explicit support from within, VDA’s goal appears to be at odds with the car industry’s approach towards market competition and its public position on climate action. One example is its support for the use of low-carbon synthetic fuels.
“The remaining CO2 emissions will be compensated for by more ambitious targets for the proportion of renewable fuels in the RED,” VDA argued as it called for a new category of plug-in hybrids models (PHEVs) to be registered as zero-emission “regardless of the fuel” they run on.
“In other words, a free-ride for those customers who don’t care about price,” said Peter Mock, managing director at the International Council on Clean Transportation (ICCT) in Germany, referring to the high cost of producing synthetic hydrocarbon fuels using electricity.
Experts have long questioned whether the production costs of so-called e-fuels can be reduced enough to make them viable for widespread road transport use, and climate campaigners argue such fuels should be reserved for sectors like aviation where no low-carbon alternatives exist.
Global economies of scale
While concerns about the high purchasing prices and a lack of charging infrastructure have long made German consumers hesitant to switch to electric vehicles, there has been significant technological progress in both areas.
Discount programmes and market competition have shrunk the price premium on EVs to just €3,655 on average, according to researchers at the CAR Institute – and an incoming state subsidy program with 75% tax breaks for battery electric vehicles (BEVs) should comfortably close that gap.
Aside from long-distance travel across the continent – which accounts for just a fraction of all private car journeys – ‘range anxiety’ is now less of an issue than it was even three years ago.
While it might take some time for Europeans to adjust to the new market conditions and opt for new all-electric cars as Europe’s largest economy struggles to recover from years of stagnating growth, European carmakers have already adjusted production to the needs of their two largest external markets: China and the US.
As Julia Poliscanova from the NGO Transport & Environment (T&E) noted: “Meanwhile, the rest of the world is going electric regardless”.
The clean mobility campaigner warned that allowing the domestic market to remain open to combustion engines for longer could severely harm the industry’s ability to remain competitive globally.
Half a year’s worth of additional emissions
T&E calculated that adopting the German industry proposals could cut BEV uptake in the EU from a projected 100% to as little as 44% by 2035. This, the group warned, could result in up to 1.4 gigatonnes of additional CO₂ emissions between 2030 and 2050.
To put that figure in context, emissions from all road transport in the EU combined amounted to 0.76 gigatonnes in 2022, according to data from the European Environment Agency.
The ’10-point plan’ thus appears at odds with key parts of EU policy on both competitiveness and decarbonisation – and there are doubts as to whether it would gain traction in other major car-making nations.
“I don’t think the French and Italian manufacturers will agree with the VDA proposal,” said Peter Mock of the ICCT, who also expressed scepticism that the European Commission would adopt the recommendations.
The Commission has, however, already accommodated the struggling industry after months of lobbying by relaxing the deadline to meet tighter emissions standards this year, and some observers see a risk of further concessions.
“Give them a finger and they’ll take the whole hand,” Poliscanova said.
(rh, aw, cp)
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