The auto industry, especially electric cars, in Europe is suffering from a recession, which undermines the European Union’s ambitious goals of ending sales of new diesel and gasoline cars by 2035.
Despite governments’ attempts to boost sales of electric cars by offering rewards for purchasing them, and strong competition from Chinese electric car manufacturers limiting sales in Europe, they have not succeeded.
The European Automobile Manufacturers Association said that the industry is doing its utmost; To comply with decarbonisation targets, but these efforts are hampered by issues including a declining market for electric vehicles, a lack of charging infrastructure and weak manufacturing competitiveness in the European Union.
The European Automobile Manufacturers Association – an industry lobby group – submitted a formal request to the European Commission, calling on “the EU institutions to put forward urgent relief measures before new CO2 targets for cars and minibuses (vans) come into force in 2025.”
Europe is racing to produce more electric cars as part of the green, environmentally friendly transition, as the deadline approaches for the European Union to phase out the sale of fossil fuel engine cars by 2035.
However, after years of growth, electric car sales began to decline at the end of 2023, and now represent only 12.5 percent of new cars sold on the continent.
The European Automobile Manufacturers Association said: “We lack the basic conditions to achieve the necessary boost in the production and adoption of zero-emission vehicles: charging infrastructure, hydrogen refueling, as well as a competitive environment for manufacturing, affordable green energy, purchasing incentives, taxes and a secure supply.” From raw materials, hydrogen and batteries.”
German cars
The problems facing German car manufacturers have been echoed in the rest of Europe, and Germany is a country with a vast industry that includes major brands, such as the Volkswagen Group, BMW and Mercedes.
Car manufacturers in Germany are suffering from weak sales, with high costs of switching to electric driving systems.
Mercedes was recently forced to lower its profit expectations for the current year, due to faltering sales in China. BMW had previously lowered its sales and profit expectations for this year.
The Volkswagen Group is facing forced layoffs and factory closures, for the first time in three decades. According to a media report, the giant company may eliminate 30,000 jobs out of 300,000 in Germany.
European countries that cooperate with Volkswagen are closely monitoring the possibility of job cuts in Germany.
In Portugal, Volkswagen’s AutoEuropa plant in Palmilla, south of Lisbon, continues to have a broad economic impact in the country, contributing 1.3 percent to GDP in 2023, and represents the major foreign investment ever carried out in the country. The country.
In Germany, a number of factors were identified that explain the reasons for the difficulties faced by the automobile industry in the country, the most prominent of which were: the stagnation of electric mobility; The cancellation of subsidies at the federal level in Germany last year led to a collapse in demand for electric cars that operate on batteries.
During last August, new car registrations in Germany declined by 28 percent, compared to the corresponding month of last year, compared to a decline in the European Union as a whole of 18 percent.
Over many years, China’s automobile market has ensured rapid growth and high profits. But the current faltering demand for German car models has dealt a severe blow to Volkswagen and other companies.
The fourth factor is: high costs; German manufacturers suffer from a significant increase in energy and labor costs. According to expert Schoop, producing lower-cost car models is unprofitable in Germany.
European manufacturers face competition from cheaper Chinese electric cars, with Brussels accusing Beijing of unfairly subsidizing local manufacturers.
In order for European electric car manufacturers not to be further undermined by Chinese car manufacturers, the European Commission presented a plan to impose additional fees on electric cars imported from China, in addition to the current fees.
This issue sparked division among European Union member states.
On Friday, ten of the twenty-seven member states of the European Union voted in favor of increasing customs duties on electric cars from China by 35.3 percent, in addition to the current duties of 10 percent.
Five countries, representing about 23 percent of the bloc’s total population, voted against the additional fees. 12 countries abstained from voting.
Diplomats from the bloc told Agence France-Presse that the customs duties will be applied for a period of five years.
Through the new tariffs, the European Union hopes to provide protection for the bloc’s automobile industry, which provides job opportunities for about 14 million of its residents.
Germany, and more recently Spain, have criticized the new tariffs, as both countries fear that they may lead to a trade war with China, while other member states support the tariffs, including France and Italy.
The decision to start imposing new fees that would spark a new wave of trade conflict between the European Union and China, starting the first of next, is still up to the Commission.
At the same time, this plan could be canceled if the Commission is able to reach a negotiated agreement with China.
“The European Union and China continue to work hard to search for an alternative solution,” the Commission said in a statement following Friday’s vote.
Following the vote, German Finance Minister Christian Lindner warned of the escalation of trade disputes, stressing in a statement published on the “X” platform: “We need a negotiated solution.”
German automakers, which include brands such as Volkswagen, BMW and Mercedes, generally oppose the tariffs as they invest heavily in the Chinese market and sell a large portion of their production in this market.
Last updated: October 5, 2024 – 20:40
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2024-10-06 21:25:22