Automotive Industry Can’t Survive the EU’s Green New Deal

Some European car producers, who have realized that the European Commission’s “Green Deal” will seal their fate and that of their clients, have begun to speak out. That is the case of Carlos Tavares, the CEO of Stellantis, an automaking cartel founded one year ago that produces 15 brands including Chrysler, Citroën, Dodge, Fiat, Opel, and Peugeot. In a joint interview published Jan. 18 by Les Echos (France), Handelsblatt (Germany), Corriere della Sera (Italy) and El Mundo (Spain), Taveres openly discusses his doubts about the EU’s policy to ban the sale of combustion engine vehicles by 2035. The decision to decarbonize the automotive industry by going all-electric, in his view, carries serious social risks, as it will increase the cost of buying a vehicle by 50%. And it’s not even that good for the environment, he argues.

At the REUTERS NEXT conference on Dec. 1, 2021, the CEO of Stellantis had clearly expressed his criticism: “What has been decided is to impose on the automotive industry electrification that brings 50% additional costs against a conventional vehicle. There is no way we can transfer 50% of additional costs to the final consumer because most parts of the middle class will not be able to pay.” That will not only doom the automakers, but also lead to massive unemployment, as many trade unions have pointed out.

In his recent interview, Carlos Taveres implicitly attacks the ideological underpinnings of the decision: “What is clear is that electrification is a technology chosen by politicians, not by industry”. One must take into account the entire life cycle of electric cars, he urges, adding that there are quicker and less costly ways of reducing carbon emissions.

“Given the current European energy mix, an electric car needs to drive 70,000 kilometers to compensate for the carbon footprint of manufacturing the battery and to start catching up with a light hybrid vehicle, which costs half as much as an EV,” he said. And such a hybrid vehicle costs only half the amount of an e-car.