How heavy is the auto industry
But de Meo made a point of premising that Brussels’ strictness towards four-wheelers (which will have to reduce CO2 emissions by 100% by 2035, while for the energy industry it speaks of 70% and for the rest of the transport by 50%) has an impact on what represents an industry of primary importance for the continent’s economy: «We are talking about almost 13 million jobs in Europe, 7% of the total. And 30% of total R&D expenditure on the continent, across all sectors. We are talking about the vehicles, cars, commercial vehicles and trucks that ensure 80% of the mobility of people and goods in kilometers every day. These percentages are expected to remain very similar through 2050.
Data that should make you think. «The response of the European institutions – explained de Meo – is of fundamental importance. We need the institutions on our side. We need them to be coherent, based on evidence and organizing the various sectors and stakeholders. We call on Europe to implement an ambitious automotive industrial policy that rivals that of other regions of the world, while safeguarding and promoting free trade on a global scale.”
With Euro 7 factories closed
And instead, to begin with, there is the Euro 7 proposal, the legislation that would regulate diesel emissions from 2025. But that’s not all. De Meo also criticized the “fit for 55” package and the ban on endothermic engines from 2035. «In its current form, according to our engineers, Euro 7 could increase the cost of cars by an average of 1,000 euros: it means doubling the final price. With this increase, we estimate a substantial reduction in the new car market, of around 7%. We know that people will keep old cars longer or buy used cars instead of new ones. It is already happening and the vehicle fleet is aging everywhere». In fact, the average age of European cars has risen again, to 12 years, in 2021.
According to Acea, a much better cost-benefit ratio could be obtained if “the enormous investments that would be required by Euro 7 were refocused, allocating them to speed up electrification, make electric vehicles more convenient or reduce emissions current fleet’, for example through low-emission fuels. The head of Renault warned against illusions: traditional vehicles «will be the majority of the car fleet even beyond 2050; if we want to get to 0 by then, we would also have to face this challenge and this is part of the truth». Ultimately, the Euro 7 proposal in its current form «will have a strong impact on our business and on our people. Deadlines are too short. Only in Renault could it lead to closure of at least four factories in a short time”.
Clash of unequal weapons with the US and China
Last but not least, the very tough confrontation with the United States and China. The former, strengthened by a recent law, the Inflation reduction act (IRA) which allocates almost 300 billion dollars to encourage the production and purchase of electric cars, but also production in the States, also attracting European companies. The risk is industrial desertification in Europe. The allies of all time have descended to a level of strong competition and in recent months there have been moments of tough confrontation. “Through the IRA we see the United States stimulating its industry in the ecological transition, while Europe’s approach is to regulate the sector, often in an unsynchronized way”, was de Meo’s criticism.
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Auto, De Meo brings Brussels back to reality. «With the Euro7 factories closed»
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