Germany scored a major victory when the European Commission decided to ease a ban on internal combustion engines that was due to come into force in 2035. German Chancellor Friedrich Merz called the decision "a major victory for the German car industry." However, experts warn that the move could backfire; it gives Chinese carmakers more time to consolidate their lead, not just in Europe but also in emerging markets.
The European Commission says the new package of car regulations manages to combine climate goals with the need for European industry to remain competitive. However, left-wing analysts and some members of the European Parliament believe that the key problems of the auto industry have not been addressed. "The package does not solve any of the structural problems of European car manufacturers, either in Europe or globally," warns Nils Redeker, co-director of the Jacques Delors Centre. "There is a serious technology gap between European manufacturers and those in China, and this package does not move things forward in either of these areas."
The Commission has reduced the planned 2035 target from 100 percent emissions reduction to 90 percent, with the remaining ten percent to be made up by investments in green steel and alternative fuels. In addition, the industry is allowed to produce plug-in hybrid vehicles, conventional internal combustion engines and so-called range extenders, small petrol engines that charge batteries, after 2035. Redeker points out that allowing hybrids could deter European manufacturers from developing fully electric cars.
While Europe is debating compromises, China has almost completely switched to electric vehicles in the past five years thanks to strong state support. Today, more than 50 percent of all cars sold in China are electric. Data from think tank Ember shows that electric vehicles accounted for a quarter of global sales in the first ten months of this year, while in 2019 the figure was just three percent.
Tariffs imposed last year have not stopped Chinese manufacturers; they quickly adapted to the market and began offering plug-in hybrids that continue to attract European buyers. Chris Heron, General Secretary of the E-Mobility Europe association, emphasizes: "Emerging markets are a huge booty that Europe cannot afford to lose. Chinese manufacturers are strengthening their positions in Latin America and Southeast Asia every day."
Europe now faces the challenge of accelerating the development of electric vehicles and maintaining competitiveness, while China is slowly but surely becoming a global leader in this industry.