Electric vehicles: Volkswagen leads the race, it's time to get in

The last week of April 2021 confirmed that in Germany as in France, the transition to electric vehicles is clearly accelerating. In Germany, it is wanted and led by VW. In France, the prevarications that VW has tried to banish from the public debate persist. However, week after week, the last reticence is being lifted and the race towards a massive switch to battery electric vehicles (BEVs) seems to be on. Such a development is an opportunity for French industry that there is still time to seize, since most of the capacity has yet to be installed. The first bricks have been laid. The industrial edifice remains to be assembled.
 One week after the announcement by the European Parliament and the European Council of stricter CO2 targets for 2030, the very clear acceleration in the pace of the transition required of the automotive industry is being emphasised on both sides of the Rhine, but is not necessarily welcomed in the same way.
 
To understand this, we can compare what was said and decided at the meeting of the Comité Stratégique de Filière in Bercy on Monday 26 April and what we heard at the "Way To Zero" Convention organised by the Volkswagen group on Thursday 29.
 
As Volkswagen points out, the "Way to Zero" Convention was designed to "encourage an open dialogue with government, industry and society" and therefore brought together speakers "from political parties, NGOs, scientific institutions and other companies as well as representatives from Volkswagen".
Without questioning whether their company is a "mission company" and/or whether they should have the board of directors vote on a definition of its "raison d'être", VW's executives have been digging the same furrow since the aggiornamento they were forced to make in 2016-2017: since decarbonisation and electrification are going to take hold, they should not wait for the authorities to decide what constraints they will impose on the car, they should go and ask for and negotiate them and, to be credible in this new posture, they should rather ask for the constraints to be stronger and apply faster than expected rather than the other way around. 
 
A former Green MEP, Rebecca Harms, who served in the European Parliament from 2004 to 2019, including as a member of the Committee on Industry, Research and Energy, came to symbolise the success of this political endeavour by VW over the past five years.
 
She agreed to become a member of Volkswagen's sustainability board after her European mandate and says she is surprised by the extent and speed of VW's change of heart. She says she has been involved in quite a few conflicts with manufacturers and VW during her career as a parliamentarian and activist and no longer sees VW as trying to block or delay binding measures, but rather that its leaders are determined to find the right settlements with the authorities.
So, in the current debate on carbon pricing, VW is instead calling for a sharp increase in the price per tonne to help convert the industries that supply it with metals and aluminium, for example, and reduce their carbon footprint. 
 
This is confirmation of the conversion/revolution that is taking us back to square one. All the research carried out on the 'Europe of the Automobile' has shown for years the great 'connivance' that existed between the manufacturers and the Commission and insisted on the fact that, since the expertise was more in the hands of the manufacturers, the directives were almost inevitably co-constructed in such a way that, in matters of emissions as well as road safety or commercial policy, Brussels almost always seemed to validate what had previously been negotiated within ACEA first and then between ACEA and the various DGs.
 
 With Volkswagengate, this collusion seemed to break down and the word of VW first and of manufacturers in general was largely devalued. Interlocutors such as Transport and Environment, to whose arguments the Commission's services were hardly attentive, have gained an enormous audience: the speed with which the switch from NEDC to WLTP took place after these events, after having been in a very long tunnel of negotiations for many years, is testimony to this change.
 
 Everything has happened since 2017 as if, for VW, the loss of this privileged access to the decision-making circuits in Brussels and Berlin had been unbearable and as if everything had been organised to absolutely preserve this strategic asset. If this meant sacrificing Diesel, Bosch and the - still relative - solidarity between German (within the VDA) or European (within the ACEA) manufacturers, then it was worth the risk.
 
This was the gamble that was taken and everything indicates that it has been won: in 2021, Volkswagen seems to be in an even better position than in 2015 to exert a decisive influence on the regulatory production process in Europe.
In fact, as Carlos Tavares and Luc Chatel have clearly understood, among the renunciations that this conversion of VW has implied, there is one that is decisive: that of technological neutrality. 
As we pointed out 18 months ago, when the -37.5% target for car emissions by 2030 had already been set, the Commission, Parliament and, ultimately, the Council, in 2018, renounced neutrality, and it was then decided that what we would see in 2020 and 2021, despite the de-Dieselisation of 95g, would only prefigure a general movement towards the affirmation of the battery electric vehicle (BEV) as an unavoidable standard in the European and probably the world's automotive industry within the decade.
 
Volkswagen was the only manufacturer to explicitly embrace this approach and to say so: "We have to make a decision now. We can't debate about technological openness anymore, it won't help, we have to change the system. I think the time for debate is over, the situation is clear: the climate targets can only be achieved with electric vehicles," Herbert Diess answered a question from Die Welt about hydrogen in March 2019. Volkswagen has not changed its position two years later. Only the number of those who have joined its camp has increased. Among them, the boss of Stellantis is well known.
 
For stakeholders, politicians and the PFA, the question in 2021 is therefore how to keep up with the 2021, 2025, 2030 and 2050 deadlines in Europe. Compared to a protesting attitude which could be that of Carlos Tavares a few months ago and which was reaffirmed by the boss of Bosch this week as it is willingly by the hydrogen "camp", we can undoubtedly see an alternative taking shape under the words of Luc Chatel and/or behind the idea which underlies the "Green Deal zones" of which Florence Lagarde spoke to us Tuesday.
It simply consists in taking VW at its own game and considering that the race for speed is just beginning around the BEV, gigafactories, new generations of batteries, electric motors, computerised battery management, etc.
 
Of course, as L. Chatel, only 1 of the 27 Gigafactories projects (that of Stellantis and Saft) is French for the moment and one of the most important (and first) of these 27 projects was the one that LG designed to supply Renault, among others, and it was not finally built in France but in Poland. 
 
In other words, it's not going very well, but we're only at the beginning and, to this vision of a glass half empty, we can oppose that of a glass half full: Renault is getting ready to localise a major part of its electric vehicle assembly in France by specialising Douai and Maubeuge in these tasks; Renault is developing its own electric motors in an efficient way and manufactures them in Cléon; Stellantis will have a gigafactory in Douvrin and has localised the manufacture of the electric motors developed with Nidec in Trémery in Moselle.
 
 Since, as Luc Chatel says, batteries are heavy, the assembly of BEVs will willingly be located in basins that will allow key supplies to be organised nearby. In the face of decades of relocation of French assemblies, which 2020 has amplified despite electrification, there is still time, when BEVs still represent only a small proportion of vehicles sold, to set up a basin in the north-east quarter of France which, for the two manufacturers and Toyota, will enable the mobilisation of all the skills and production capacities necessary for the design and manufacture of BEVs and their key components.
 
 Since carbon content seems set to become the new obsession of manufacturers in the face of their customers and public authorities, being able to supply French consumers, who will continue to be fond of smaller and more affordable vehicles than the Germans, from this centre could then be a determining advantage.
If the electric B of the Peugeot, Citroën and Renault brands, which in the future will make up the majority of the volumes sold in France and will find major outlets in all the markets of Northern Europe, were to be added to the C in their French sites, then the movement which emptied Aulnay and Flins would be reversed and electrification would have a re-industrialising effect. This is not out of reach but it is necessary to start on time, in 2021. 
 
03/05/2021
 
 

The weekly column by Bernard Jullien is also on www.autoactu.com.

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