ACEA: Slow Progress in Electrification, European Automotive Industry Facing "Perfect Storm"

The head of the European automotive lobbying group said that before the EU introduces stricter new carbon emission rules, European car manufacturers are facing increasingly daunting challenges with disappointing demand for electric cars and rising costs. During an interview on Wednesday, the Secretary General of the lobbying group, Sigrid de Vries, said that the European automotive industry still has a shortage of over 2 million cars in the market and factories compared to pre-pandemic levels. This has created a significant amount of tension - we sometimes refer to it as a near-perfect storm. Last week, the European Automobile Manufacturers' Association (ACEA) called for "emergency action" before stricter EU emission targets take effect in 2025. This could result in fines of several billion euros for some European car manufacturers, while Chinese electric car manufacturers are boosting sales in the region. De Vries stated that while European car manufacturers are still committed to green transformation, regulators need to be more "flexible" and find better ways to support the industry. "We are currently in a lot of negotiations," De Vries said, "we are informing policymakers about what the problems are, what the concerns are, and what the background of these concerns is." European electric car sales have fallen below expectations following reduced incentives in countries including Germany. The decline in Italian car production has also been closely monitored, prompting Prime Minister Meloni's government to reconsider EU rules. Volkswagen (VWAGY.US) outlined its plan to shut down its German factories for the first time this month to save costs. As part of the EU's target to reduce carbon dioxide emissions next year, Volkswagen expects to face the highest fines.