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The head of Europe's Automobile Manufacturers' Association (ACEA), Ola Källenius, has called on the European Union to revise its environmental policies. In an open letter sent to EU leaders, he warned that a failure to do so could impact the competitiveness of European manufacturers and stifle innovation.
The EU is working towards a goal of carbon neutrality by 2050. To help hit that target, by the end of the year new cars and vans registered in the bloc must produce 15 percent less CO2 compared to 2021 levels or face fines of $98 per gram of CO2 per vehicle that's above that limit.
These new regulations come off the heels of a record-breaking year for the electric vehicle industry. According to EV research firm Rho Motion, more than 70 million EVs were sold last year – marking a 25 percent increase from the year previous.
But just three million units were sold in Europe, a 3 percent decline from 2023. "That's really been dominated by the big fall-off we've seen in Germany and that has been pretty much attributed to the subsidy removal, tough economic conditions, political instability as well to some extent in major markets," Rho Motion's automotive research lead Will Roberts told CGTN.
Considering trends, amending policies?
The ACEA is calling on the EU to take recent market trends into consideration and amend its current regulatory policies. As well as penning a letter to EU leaders, Källenius also gave an address at the Brussels Auto Show, currently underway in the Belgian capital.
"Very few forecasts predicted the current geopolitical and macro economic realities," Kallenius said at the event. "Yet the majority of European political goals and guidelines are based on forecasts that have not materialized."
Cars and light trucks account for roughly 16 percent of the EU's total CO2 emissions. Chinese electric vehicles are around 20 percent cheaper than European rivals and some analysts say strict environmental measures are required to fuel meaningful action from European brands.
"These rules will push our carmakers to catch up. They will push them to produce more mass market electric vehicle models and this will help the industry to become more globally competitive," said Julia Poliscanova, Senior Director, Vehicles & E-mobility at the nonprofit organization, Transport & Environment.
European carmakers say the prospect of heavy fines would divert funds from research and development and provide a boost to competitors overseas.
Environmental groups reject that argument and are urging the EU not to veer off track when it comes to its emissions targets.