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Carmakers plead for Europe to postpone a 2035 ban of gas-powered cars less than a day after it’s announced

June 9, 2022, 4:22 PM UTC

Europe’s plan to ban conventional gas-powered cars come 2035 is less than a day old, but already it’s coming under attack from the auto industry.

Late on Wednesday, members of the European Parliament (MEPs) voted by a majority to approve a staged reduction in tailpipe emissions of new cars sold across the 27-nation bloc. 

Part of its landmark Fit for 55 climate legislation, a reference to its overarching carbon reduction target of 55%, would eventually foresee a complete end to the sale of combustion engine vehicles, among other measures

Europe’s auto industry argued on Thursday it was upholding its end of the bargain by rapidly rolling out battery-powered vehicles—now 10% of all new cars sold. But it pushed for a ban to be considered only around 2028 when there’s greater visibility.

The reason automakers are so concerned is that while the ban sounds distant, in industry terms it’s just around the bend. 

Often three or four years can elapse between the time when a company begins to design a new car from scratch and the start of its series production.

Upfront investments are considerable, meaning most models need to be sold for a subsequent six or seven years before they achieve their anticipated return. 

By the time a combustion engine car that is green-lighted for development today completes its full life cycle, there will be no more time to develop a successor generation: That will be the end of the model. 

Carmakers are in the process of shifting their investment budgets en masse from gas-powered cars to EVs, but if demand doesn’t follow, either because prices are stubbornly high or charging stations remain sparse, then they could find themselves in a dilemma.

Compared to the industry’s mandated 2021 target average of 95 grams per kilometer, manufacturers will have to reduce emissions by a further 15% by 2025, another 55% by 2030, and the full 100% by 2035.

None of this can be reached without a significant increase in electrification. Even Lamborghini has said it will sell the very last pure combustion-engine-powered car next year as it shifts to hybrids. 

Speaking on behalf of all his peers in his role as lobby president, BMW Group CEO Oliver Zipse said: “Such a review will, first of all, have to evaluate whether the deployment of charging infrastructure and the availability of raw materials for battery production will be able to match the continued steep ramp-up of battery-electric vehicles.”

In its annual global EV outlook report, the International Energy Agency recently warned that demand for battery-grade metals was causing a spike in prices for commodities like lithium and nickel, warning that on a like-for-like basis these could add 15% to the overall cost of a pack

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Making matters worse for the industry, the European Parliament also ruled against including road transport in a broader trading scheme that caps total, not just average, emissions.

This would have effectively shifted some of the burden for reducing CO2 onto car owners in the form of higher gas prices, providing an extra impetus for customers to prefer ultraefficient cars.   

The move endangers the future of iconic cars like the Porsche 911, which would lose half its market.

Its unique sloping silhouette and sporty handling were built around the flat, low-mounted six-cylinder boxer engine positioned at the rear for better grip on the drive axle.

Equipping the car with a battery in the floor would present such a fundamental change to its driving dynamics that management has privately raised doubts as to whether a similar-looking EV would ever be accepted by the 911’s devoted fan following. 

Even bread-and-butter models like the Volkswagen Golf, a ubiquitous fixture on European roads, could be in acute danger if the sale of the compact hatchback is no longer permitted in its primary market. 

Porsche, which plans to list its shares later this year, had championed ultra-low-carbon synthetic fuels as an answer and invested in a pilot production plant in Chile

These function by splitting water molecules into their constituent atoms using electricity.

Hydrocarbons similar to those that constitute gasoline can then be formed by adding carbon captured from ambient air. The drawback is it requires plenty of surplus renewable wind energy that would otherwise be lost, prompting the European Parliament to rule out this rather inefficient option.

On Thursday, one of the junior coalition partners in Germany’s government demanded Berlin veto the legislation before it can be passed, unless an option was included that explicitly allows the use of synthetic fuels.

“Without this change, an approval by Germany is not conceivable,” wrote finance minister Christian Lindner, citing policies anchored in his coalition agreement with the Greens and Social Democrats.

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