When sworn rivals in the market come out with a joint position, it is rarely just a coincidence. It is more likely a cry for help. At this year’s Paris Motor Show, we witnessed precisely such an unusual alliance. The senior management of Stellantis, Volkswagen and Renault united around a set of ultimatum-like demands directed at regulators in Brussels: urgent easing of environmental standards, state support for local production and firm protection against the offensive from Asia.
The main reason for this unprecedented consolidation is crystal clear. The pressure on the sector is coming from several directions at once. On the one hand, there are the soaring electricity prices across the continent and significantly weaker interest in electric cars compared with the initially optimistic forecasts of analytical agencies. On the other hand, the spectre of hefty fines for excessive CO2 emissions is looming, threatening to seriously drain the budgets of European companies. The rhetoric is no longer merely cautious. François Provost, Renault’s head of external relations, went so far as to state that the European Union’s lack of flexibility regarding the sanctions could lead to a drastic reduction in production on the continent, by more than 300,000 vehicles.
The big question remains how the Old Continent allowed itself to be so unexpectedly overtaken in the global race for electric mobility. While local companies were making their way through the complex labyrinth of European bureaucracy, Beijing was systematically pouring capital and resources into a long-term strategy for developing its technology sector. The blame can hardly be placed entirely on Brussels’ administrators, although they were precisely the ones who failed to create a viable environment for implementing the so-called “Green Deal”. The acute shortage of affordable energy, the underdeveloped charging network, the lack of domestic battery production and the absence of genuinely effective state incentives remain a bitter reality.
The paradox is even greater because a number of iconic European brands have begun seeking lifesaving technologies precisely from their Chinese competitors. In this situation, the logical question arises: to what extent does a new car remain genuinely European when its software, platform architecture and the battery itself are supplied from Asia? With such dependence, talk of industrial sovereignty begins to sound more like a wish on paper.
Pure protectionism is also far from a solution to the problems that have accumulated. Let us not forget that companies from the East have highly optimised supply chains and significant achievements in high-tech components. Exporters quickly adapted to the new conditions and, alongside standard electric vehicles, also directed a wide variety of hybrid models towards European showrooms. Even the recently reached unofficial agreement between Brussels and Beijing on import quotas is more an attempt to preserve profit margins and established logistics channels for a short time than a genuine victory for the Old Continent.
Analysts are adamant that without a radical change of course, the European automotive industry is entering one of the most severe crises in its history. All administrative barriers and protective tariffs can only slow the decline, but cannot remove its causes.
The bill will once again be paid by the end customer. Higher retail car prices and a potential deterioration in the quality on offer will be direct consequences of the protectionist policy. European consumers will have to dig deeper into their pockets to cover the cost of the changes imposed.