As European automakers brace for a possible trade war waged by President Trump, they are working to ward off another threat on their home turf: the prospect of paying hundreds of millions of dollars to Tesla and Chinese competitors muscling in on their core markets. Under stricter European Union regulations taking effect this year, automakers selling cars in Europe face hefty penalties if their vehicle production fails to meet tough targets for reducing carbon emissions. With demand for electric cars in Europe slumping and manufacturers squeezed by competition from China, automakers, politicians and industry groups are lobbying for relief. After an industry summit in Brussels Thursday, Ursula Von Der Leyen, the president of the European Commission, the European Union’s executive branch, acknowledged the challenges the auto industry faced and pledged that regulators were “acting swiftly” to address them. Under the rules, carmakers can meet their targets by increasing the number of zero-emissions cars they produce or reducing their output of vehicles with combustion engines. There is another option: they can buy emissions credits by “pooling” with companies that make only electric cars and have an abundance of credits. In a twist of fate, that has the European carmakers turning to some of their biggest rivals, including Tesla and Geely of China, which owns Volvo Cars and has a controlling stake in the electric vehicle maker Polestar. The strategy of buying emissions credits is not new, but it has recently set off alarms in France and Germany, home to Europe’s biggest automakers, because it comes when demand for electric cars is softening, leading to threats of factory closures and the loss of thousands of jobs. Adding to the concerns in Europe is Elon Musk, the chief executive of Tesla, who has criticized E.U. tariffs on electric vehicles made in China and has been accused of interfering in politics in Britain and Germany. A rigid stance that would result in billions transferred to Chinese manufacturers, some of whom have conquered their European market share through unfair trade practices, or to Tesla, whose C.E.O. Elon Musk is openly attacking European regulations and values, would be a political error, France’s minister for European affairs, Benjamin Haddad, wrote in an open letter published in French newspapers this week. The E.U. measures also require at least a quarter of all new cars produced this year to be electric. Most of Europe’s big carmakers, including Mercedes-Benz, Volkswagen and Stellantis, are nowhere near hitting their targets. They produce more electric vehicles than ever before, but they also continue to crank out gas-fueled cars and trucks to meet customer demand.
Source link
