Negotiate the prohibition of the combustion engine vehicle against a real consideration of the two social issues

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It is almost certain, at the end of May 2022, that the proposals to ban the registration of new combustion vehicles in 2035 will be adopted. German and other opponents are throwing in the towel and the PFA's usual objections appear to be a futile last stand. In a context where most of the 27 Member States are not very concerned and where, since the VW affair, the voice of industry has become barely audible, these statements are unlikely to be heard. Although not all the arguments put forward are equally acceptable, the issues of the ability of households to purchase electric vehicles and the ability of employees to keep their jobs are unavoidable and NGOs and governments would do well to take them into account.

With the signing of the letter coordinated by T&E to ask for validation of the Commission's proposal of last July by certain manufacturers such as Ford and Volvo, announced last week, and the position taken the same week by the German, Italian and Spanish governments in the same direction, the die seems to have been cast: registrations of vehicles with combustion engines will be prohibited in 2035. 
As Florence Lagarde pointed out on Thursday, Pascal Canfin stressed that "no country has raised the fact that it would not be possible to have zero emissions for passenger cars in 2035" and this means that the French Presidency of the EU, which some had hoped would water down the proposal, has realised that it was pointless to enter into a fight that would have been lost anyway. 

In desperation, the PFA issued a protest that the NGO T&E readily interprets as it interprets the letter that the head of BMW, the current President of ACEA, sent to E. Macron as President of the EU: it is another manifestation of the "double talk" of the manufacturers and the industry, who claim to be very committed to electrification but who are, at the same time, very keen to delay its advent.

It is understandable that, for these NGOs who have heard manufacturers protest for years about their good faith when it comes to reducing emissions, only to do everything in parallel to keep the test cycles as tolerant as possible and then use dubious procedures to certify their vehicles, mistrust is the order of the day. Since 2015 and the Volkswagen affair, the tide has turned and, with European or national parliamentarians who have also had the opportunity to test the cunning of manufacturers or their representatives, NGOs tend to win all the battles and to make the protests of manufacturers appear to be attempts, which have become futile, to preserve their rents and/or to do nothing. 

The issue of charging stations continues to be used in this way to shift some of the burden of adjustment onto the taxpayer and/or to explain or excuse the relative failure of the battery electric vehicle (BEV). The string is thick and works less and less, but it has worked and still works. In the same way, the argument in terms of "technological neutrality" to which some still cling seems very fragile in a context where China and Volkswagen have already chosen and made the BEV a universal standard that all manufacturers have already adopted.

As the history of 'technical systems' teaches us, once this technology has been adopted, it drains all the material and intellectual investments and obtains the contributions of 'tributary technologies' which flow into this river and not into the others, which are gradually drying up.  Thus, the objections that its adoption raised or is still raising (including the major one concerning strategic raw materials) are infinitely more likely to be overcome now than when there was still hesitation and, from the point of view of the supporters of "non-neutrality", neutrality and immobility readily go together.

The same scepticism can be applied to the argument that carbon neutrality should be understood as including not only direct emissions but also those generated by the manufacture and, above all, the production of the electrical energy used to recharge the batteries (or produce hydrogen). This is not the responsibility of the manufacturers and the value chain in which they have an influence. It is therefore not appropriate to include them in the standards applied to them and, as Diane Strauss of T&E points out, they are not asking for it and therefore seem to be using the argument only to delay the move.

On the other hand, two key arguments of the PFA and the ACEA deserve to be examined with much more attention and, from this point of view, once their battle has been won, environmental NGOs will have every interest in exercising a right of follow-up - and/or being subjected politically to a "duty of follow-up" - and in being much more mobilised alongside the territories, the States, the employees and their trade unions: these are the two social issues, namely the question of the accessibility of vehicles and the related question of employment. The PFA points to both and, indeed, from the French point of view, the adoption of the Commission's proposal is problematic on both counts. To clarify the idea, we can take up a thought that Yann Vincent, the head of ACC, made at the FEAL conference in the autumn of 2021 when he was asked about the social consequences of electrification. 

He replied that the question was to know
i) what proportion of electric vehicles will replace combustion vehicles in 2025, 2030 and 2035?
ii) to what number of registered vehicles the percentages would apply.

The second question is the affordability of electric vehicles and, with the volumes registered in 2022, it is understandable that this question needs to be asked seriously. Indeed, we cannot be sure in May 2022 that the historic decline in registrations is only due to component shortages and fears about the future caused by inflation, rising interest rates and the Ukrainian crisis. Electrification as orchestrated in Europe by the industry and, in particular, by the German industry, is prolonging and accentuating for the time being an upmarket or 'premiumisation' which is gradually making people forget about figures such as the Zoé or the C-Zero or e-Up to feature the Model 3, the ID3 or ID4 or the Mégane E-Tech. 

If decarbonising means offering plug-in hybrids at 45,000 euros and BEVs at 40,000, then we must accept that the registration of 17 million cars in Europe will become a distant memory by 2025. We must also accept that, as has been the case since the drift in vehicle prices and weights began, French brands and the French site will be marginalised. Yes, the PFA is right, we must win the battle of affordability, but it is not by asking to preserve the rechargeable hybrid, which is a motorway for the Germans and Volvos who only leave us a few fragile access ramps, that we will succeed: by defending rules defined by others for them, we can possibly hope to follow them, but no more! Renault has started its Electricity activities with the Mégane and this week presented a Scenic which seems to be going in the direction of suicidal "premiumisation". The manufacturer has plans for an R5 and a 4L that tell a very different story for the future. It is to give it scope and to rally Stellantis to it that we must work today.

This then links up with the social question, which for obvious reasons is ignored by most MEPs and Council members: only a very small minority of them are affected by the foreseeable social breakdown, and they do not necessarily know it. Those of them who should be worried are not yet, because the movement that the adoption of this prohibition in 2035 is intended to accelerate has barely begun and its effects are masked by the national "whatever it takes" that have allowed the survival of companies that were already zombies with the de-differentiation and that short-time working has put on a drip.

With the certainty that the adoption of the measure will generate and the end of the support measures that could accelerate the rise in interest rates, the manufacturers will hasten the movement. They will not wait for Euro 7 to be imposed on them and 2035 to completely electrify their catalogue and what we have already sensed with the de-dieselisation and the effects it had before the Covid crisis on a certain number of professions such as founders will affect the sector in the months and years to come, well before 2035. 

In France, the effect is going to be major because, as assembly deserted the territory, the relative weight of the Powertrain part increased and we ended up being net importers of vehicles but remained exporters of engines and, therefore, very specialised and dependent on these activities. Insofar as this constrained specialisation is linked to an assembly that has focused on LCVs for which electrification has barely begun, the banning of the combustion engine is, all things being equal, a kind of insurance against major social and industrial suffering. The PFA is therefore not in the process of "blackmailing jobs", in defiance of the awareness of the climate emergency. It knows its sector. It has documented its forecasts for the evolution of the workforce in the various professions that make it up and is simply doing its job - like others - as a "whistleblower". 

We therefore know that the back offices, which the preservation of the GMP sector in France had allowed to be maintained when assembly had left for the low-wage countries of the greater Europe region, will suffer terribly. It is therefore imperative to bring back the assembly of small vehicles and not to lose the positions of the French site in the LCV. It is in these terms that the new government must approach the subject and it is probable that the constitution of a Franco-German axis is the worst idea to achieve this: the German constructors and equipment manufacturers have an interest in digging the furrow of premiumisation; it is imperative that we challenge it.

 

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

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