The day after the European Union presented its plans for new emissions rules, the auto industry is clearly looking for guidance. The Volkswagen Group is satisfied and speaks of a “pragmatic design”, especially because small electric cars will soon be particularly promoted. And the Wolfsburg-based company wants to bring out many new models in this segment. At the car lobby association in Berlin it sounds completely different. The VDA must take into account the interests of the entire industry, from suppliers to the luxury manufacturers BMW and Mercedes. Overall, the association says the overall package is disappointing. Instead of really focusing on openness to technology, Brussels is just paying “lip service”. New requirements such as the use of green steel and renewable fuels created new hurdles for the industry. The European Commission presented a package on Tuesday that is intended to give the industry more flexibility on the one hand, while maintaining the course towards clean drives on the other. From 2035 onwards, CO2 fleet emissions will only fall by 90 percent compared to 2021 – instead of 100 percent as initially planned. This means that new gasoline or hybrid vehicles can still be registered afterwards, just like electric cars with a small combustion engine on board that extends the range, so-called range extenders. “Super credits” for small car manufacturers However, manufacturers who want to sell cars with combustion engines must use climate-neutrally produced steel for the construction and fill them with biofuels. Strict rules apply to company fleets, so battery vehicles will soon have to make up a large proportion, even under the new regulations. In its own estimates, the Commission assumes that by the middle of the next decade around a third of new vehicles sold will still have a combustion engine or hybrid drive. The rest would therefore have to be fully electric. Manufacturers who are already relying on electric small cars “made in Europe” are pleased. This includes not only the German VW Group, but also Renault from France. With the R5, R4 and the newly launched Twingo, built in Slovenia, the French have three electric vehicles on offer that are less than 4.20 meters long and fall into the planned new “passenger car subcategory” called “M1E”. The sale of cars from this category produced in the EU should from now on earn manufacturers “super credits” towards their CO2 targets. Activate external content The fact that less strict rules should apply to the construction of “M1E” cars in the future than to larger premium cars is also in Renault’s spirit. Together with the Opel parent company Stellantis, the French have lobbied vehemently for such differentiated regulation in recent months. “Do you really need a lane departure warning system in cars that drive 95 percent of their time in the city?” Renault boss Luca De Meo, who was in office until the summer, asked rhetorically. The current regulations would “not make it possible to produce small cars under acceptable profitability conditions.”EU increases the incentive to build small carsThe combination of “super credits” and reductions in regulation gives manufacturers a strong incentive to invest in small electric cars in Europe and also bring them onto the market cheaply. This could help this segment, which has been politically demanded for a long time, achieve a breakthrough. So far there are only a few models like the ë-C3 from the Stellantis brand Citroën, produced in Slovakia, which can compete with small combustion cars with prices of less than 20,000 euros. Renault’s R5 and R4 models produced in northern France, for example, cost just under 25,000 and 30,000 euros, respectively, even in the entry-level version with a small battery. VW will be bringing the first cars of its “Urban Car Family” onto the market next year, which will include the ID.Polo model with a starting price of around 25,000 euros. An even smaller model for 20,000 euros is planned for 2027, the “ID.Every1”. It has always been clear to the premium manufacturer BMW that the hard decision to end the combustion engine is a wrong move. CEO Oliver Zipse always said that what was needed was openness to technology, not bans. Like Mercedes, BMW sells many company cars. And these fleets must now be electrified faster than before. Mercedes also criticized the new regulation on Wednesday. Above all, the regulations for the use of green steel and clean fuels must now be analyzed carefully. “Mobility must become carbon neutral, and battery-electric mobility remains the main path to decarbonizing our industry.” The biggest difficulties are looming in the ranks of suppliers, many of whom exclusively produce parts for the combustion engine. Experts fear a “Havana effect” for used cars. Private car buyers could experience a price shock on the used car market: As encouraging as the price development for electric cars may be, the opposite effect could even occur for used combustion engines. Experts speak of a “Havana effect” – a phenomenon in the auto industry in which customers keep their old vehicles longer instead of switching to new ones due to high prices, inflation and interest rates. Under the new EU regulations, operators of large corporate and rental car fleets could quickly start purchasing large quantities of diesel and gasoline vehicles before the new regulations take effect – with the effect that prices will skyrocket. Car rental companies in particular are under particular pressure and are now confronted with an almost paradoxical situation: for them, the weakened ban on combustion engines means a de facto bringing forward the “end of combustion engines” by five years to 2030 a majority of new registrations. At least that’s how Sixt’s co-chairman Konstantin Sixt sees it, who is particularly bothered by the national electrical quotas, which have led to more bureaucracy. “From our point of view, supported by studies and customer surveys, a successful transformation follows a clear principle: demand follows the fast-charging infrastructure, not the other way around. That’s what Brussels should focus on.”More on the topicHis brother Alexander, also co-head of Germany’s largest car rental company, recently spoke to the F.A.Z. referred to the inadequate charging infrastructure in Europe. Around 60 percent of all European charging stations are located in the three EU member states Germany, France and the Netherlands. “Or to put it another way: 80 percent of the entire EU is a charging desert,” he said. “Try charging an electric car in southern Europe, where there are virtually no charging options.” But in his words, the charging infrastructure in Germany is still far from sufficient, as almost half of all local municipalities do not have a single public charging option. In fact, the federal government had already set the goal of one million charging stations in 2019, today there are only around 180,000. Charging station operators complain that the approval process in the public infrastructure is too long. And that’s not all, said Sixt: “The charging stations alone aren’t enough; a lot of additional power plants still have to be approved and built. This is literally a battle of the windmills.”
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