Everything must change for everything to stay the same? Prospects and contradictions of the electrification of the European automotive industry

Abstract:

Since 1998 the European Commission has tried to reduce cars greenhouse gas emissions by regulating the average CO2 emissions of new cars sales: from 174 CO2 gr/km in 1995, to 130 gr in 2015, and 95 gr in 2021. But this policy has proved largely inefficient. While the total greenhouse gas emissions in the European Union have diminished by 16% between 2000 and 2017, those from the transport sector, which account for roughly one fourth of the total emissions, have increased by 3%. Road transport is by far the main culprit with cars representing 60% of total transport emissions.
The dieselgate scandal in 2015 has revealed one of the main causes of these disappointing results. Due to the fact that the homologation test for new cars was performed at country level and had not changed since the 1980s, car manufacturers had optimised their cars for the laboratory test, including the use of deceit devices, to comply with the regulation, while their real drive emissions were declining only marginally.
After the Dieselgate scandal, the European Commission has decided under strong pressure from public opinion and environmental ONG to drastically harden their policy: it has introduced a new double homologation test in laboratory and in real drive conditions, increased penalties in case of non compliance, and set a new limit of 80 CO2 gr/km for 2025 and of 60 gr/km for 2030. The main implication of these changes is the de facto abandon of the technological neutrality previously defended by the European Commission and by the lobbies of the European automotive industry. It is now clear that car manufacturers will need to rapidly increase the sales of electric vehicles to comply with the 2021 and 2025 CO2 targets, or face annual penalties estimated today at about 40 billions € for the whole industry. Furthermore, other measures associated with this new regulation, such as the incentive mechanism for zero- and low-emission vehicles, explicitly target a transition towards battery electric vehicles, excluding other green vehicles, such as hybrid electric vehicles, natural gas vehicles, bio-fuel and clean diesel. This shift at the European level is mirrored by changes in policies at national and city levels, where many governments and administrations have announced the ban of internal combustion engine cars by 2040.
The purpose of this article is to analyse the prospects of this new policy and its likely effects on greenhouse emissions of road transport through the prism of its own contradictions. We will argue in particular that while this new policy hardens the existing legal framework on CO2 emissions for new car sales, it does not deal with the institutional causes of its previous failure.
First, it does not challenge the parameter by which the CO2 target for each car manufacturers is based on the average mass/weight of the vehicles sold, meaning that if the vehicles are heavier the targets are less demanding than for lighter vehicles. For instance, for Daimler, whose average mass per vehicle is of 1607 kg in 2017 the 2021 target is of 103 CO2/gr per km, while for PSA, whose average mass is of 1273 kg, the target is of 91 CO2/gr per km. The German government had managed to introduce this parameter in the European regulation in 2008 in order to protect their premium car manufacturers. But its effects have been much more important than that. Since heavier cars were more easily compliant with the regulation, and since it was also much easier to introduce expensive greening technologies in such expensive cars, it has pushed the whole European automotive industry upmarket. Between 2000 and 2017 the average mass of the new cars sold in Europe has increased by 10% (source: ICCT), deteriorating as a result the real drive CO2 performance.
For this very reason, the average car sold in Europe has also become much more expensive during this same period: from 20000 € to 28000 € (source: ICCT). Which is why households have found more and more difficult to acquire one. This has resulted in a fast aging of the car fleet and has diluted and slowed down the diffusion of new green technologies. Since the electric cars are proportionally much more expensive than conventional ones (of about 10000 €), it is already evident that the current policy will reinforce this trend. Also, the fact that very generous government subsidies will be available for rich households to acquire these expensive electric cars, while poorer households will bear the economic and social cost of holding to old and polluting cars, will probably raise political opposition, as exemplified by the recent yellow jackets’ movement in France.
Finally, one of the main causes of the increasing CO2 emissions from road transport in the European Union is not addressed. As shown by the European Environmental Agency data, the main contributors to this growth are the new members States from Central and Eastern Europe. Their total CO2 emissions from cars have increased by 80% between 2000 and 2017, while in the EU17 countries they have decreased by 6%. This is due mainly to the fact that their rate of car equipment has grown much faster than in EU17 countries, but rather than buying new cars, they have massively bought old second hand cars imported from Western European countries. All the attempts to regulate these imports have been systematically banned by the European Commission as they violated the principle of free circulation of goods in the Single Market.
Since it is already clear that these countries and their citizens will not be able to access the new electric cars, it is very probable that this new policies will enlarge the divide between rich and poor European countries, as well between rich and poor households.
The article will explore all these contradictions, and analyse its political, social and environmental implications.