The European car industry may soon face a stiff challenge at home and abroad from Chinese electric vehicles. Faced with China’s unwavering plan to accelerate the introduction of electric and hybrid cars, European manufacturers have joined forces with other global producers to plead with Beijing for a ‘less ambitious’ roadmap.
China plans to set goals for electric and hybrid cars to make up at least a fifth of Chinese auto sales by 2025, with a staggered system of quotas beginning in 2018. The proposed new rules seem to dismiss an earlier ‘softer’ agreement reached by German Chancellor Angela Merkel and Chinese Premier Li Keqiang.
Beijing also sees the new policy as a means to help its own car industry compete with foreign rivals that have decades more experience in internal combustion engines.
Europe’s ACEA carmakers association confirmed to EURACTIV.com they had co-signed the letter, sent on 18 June, which said the proposed new rules were too ambitious.
The letter was also signed by the American Automotive Policy Council, the Japan Automobile Manufacturers Association and the Korea Automobile Manufacturers Association.
A source close to the European auto industry told EURACTIV that Europe was clearly feeling the heat because “certain Chinese companies have made big progress [in electric cars], overtaking some European manufacturers”.
“It would have taken the Chinese ages to compete with, let’s say, Audi, in building sophisticated turbo engines but electric motors are simple to build, the only challenge is the battery.”
“The Chinese can move very fast and will be able to penetrate the European market…China has a chance to start coming up with cars that fulfil European standards. I think the ‘war’ is starting,” the source said.
Europe’s automobile industry continued the positive trend of the last three years in the first quarter of 2017, with rising sales and exports, ACEA said in a report released on 26 June. The report also noted a further shrinking of the market share of new diesel passenger cars, compared to an almost 30% surge in the number of electric cars.
ACEA told EURACTIV “the four associations’ aim was to share their global experience and knowledge in order to contribute to the improvement of the proposed new electric vehicles rules”.
“Addressing their common concerns, the associations made several recommendations to the [Chinese] minister concerned to help ensure that the legislation will be as effective as possible in meeting its goals of increasing fuel efficiency and reducing greenhouse gas emissions,” ACEA said.
An ACEA source said the letter was not a “sign that we are worried or that we are pushing for something. It was rather friendly and made a few suggestions, with respect.”
According to Reuters, the letter said “the proposed rules’ ambitious enforcement date is not possible to meet. At a minimum, the mandate needs to be delayed a year and include additional flexibilities.”
The auto industry bodies also urged China to reconsider some of the penalties for not achieving the quotas, such as plans to ban carmakers from importing and producing non-new energy vehicles altogether.
They also called for equal treatment of Chinese and foreign makers. Foreign carmakers are currently excluded from getting full subsidies for new energy vehicles and batteries.
“This preference for domestic automakers over import automakers undermines the environmental goals of the regulation, puts imports at a competitive disadvantage, and risks opening China up to international trade disputes,” the letter said.