European Regulations for an Affordable Sustainable (Battery) Electric Vehicle

Mots-clés:

Résumé:

Why do we need a small, affordable, sustainable electric vehicle (ASEV)?

• Europe is not on track to meet the Fit for 55 targets for new car sales because of the lack of affordable offer to support rapid ZEV adoption;
• Europe is still very far from achieving carbon neutrality for the European car fleet in 2050, because actual ZEVs are not sustainable in production;
• Electro-mobility and the 2035 ban on non-ZEVs are increasingly unpopular and contested;
• Without more production volumes, the European automotive industry is facing significant short-term factory closures and massive restructuring, as Chinese FDI increase overcapacity;
• Increasing Chinese price competition on EVs represents a major threat for the European automotive industry;
• In 2025, European automakers need to sell at least one ZEV for every four ICEVs to meet their CAFE threshold and avoid penalties. This ratio should increase to one ZEV for every ICEV in 2030. ASEVs, because of their low price, could contribute significantly to meeting these targets while keeping the European automotive industry competitive and profitable.

Why do we not have an ASEV in Europe?

We identify three main causes that need to be addressed if we want to bring back affordable and sustainable vehicles:

• Increasing uncoordinated regulatory pressure that makes the production of smaller and lighter vehicles unprofitable;
• The absence of policies aimed at preserving/promoting AS(E)Vs for environmental and social reasons;
• The upmarket drift of new car sales and oriented towards exports and global markets, rather than the average European consumer.

What can we learn from countries where such AS(E)V exist?

JAPAN: In Japan, Kei cars - small vehicles typically weighing less than 900 kg - are playing an increasingly critical environmental and social role in Japan's green growth strategy by providing rapid improvements in fuel economy, affordable access to clean and safe personal mobility for low-income populations particularly dependent on cars for mobility, and maintaining domestic manufacturing (in 2023, around 1,7 – 2,2 million vehicles, more than the current joint car production of France and Italy).

- HOW?

• Key role of a caped vehicle category that prevented the “upmarket” drift” relative to compact and standard cars and attracted significant fiscal and non-fiscal advantages for its buyers, drastically reducing Kei cars acquisition and use costs compared to other vehicle categories;
• Preservation and development of a large dynamic market driven by the proliferation of new different models and marked by regular product and technology innovations;

• Above all, a long-term social, political, and industrial compromise between consumers/citizens (who want to buy Kei cars), automakers (who have a protected, dynamic, and profitable market), and regulators (who can articulate industrial development, transportation, and energy efficiency policies).

CHINA: The New Energy mini-Vehicles’ segment has been the fastest growing BEV segment in the Chinese market, providing extremely affordable access to electric mobility in large urban agglomerations, and generating significant production volumes for NEV Chinese manufacturers.

- HOW?

• The dynamic and flexible articulation of national policies promoting a NEV industry producing at scale, regional policies supporting local manufacturers, and major cities’ regulations providing both the dense recharging network infrastructure needed by such mini-vehicles and strong fiscal and non-fiscal incentives to promote their diffusion;
• A strong demand for personal affordable mobility from middle-class populations living in the prioritized areas of deployment of NEVs.

How can we promote a European made ASEV?

Our proposal to bring back ASVs in Europe via an ASEV is articulated on 5 complementary measures:

1. Create a sub-M1 category (M1 ASEV) caped in dimensions, mass and power, relatively easy to implement in the EU regulatory framework, with a large market but not taking advantage of an immediate correction of the regulatory pressure;
   <OR> 
   Create a new-M0 category (M0 ASEV) caped in dimensions, mass and power and limited in use (speed <110 km/h), providing room for reduction and modification of regulatory pressure (to be estimated), but more complicated to implement in the EU regulatory framework (creating the M0 ASEV category would probably take about three to four more years than creating the M1 ASEV) and smaller market size compared to M1 ASEV.
2. Adjust the CO2 regulation for ASEV and more efficient decarbonisation:
   
   1. Introduction of a degressive ASEV Multiplier (similar to “Supercredits”) (2026-2030) to support ASEV take-off;
   2. “Long term” shift towards LCA based CO2 targets for all segments of BEVs progressively starting in 2030.
3. Introduction of a dedicated financial framework to support production take-off:
   
   1. The IPCEI framework could be used to accelerate the establishment of the European value chain needed to produce ASEVs.
   2. Temporary production credits could be introduced following the example of the Inflation Reduction Act in the USA.
4. Introduction of a European Eco score for cars:
   
   1. Based on the European proposed LCA (2025);
   2. To provide transparent and clear information to consumers;
   3. Acting as a transversal activator of a “true” decarbonisation strategy across currently siloed DGs;
   4. Providing a flexible political tool for different national and cities policies and priorities through financial / non-financial incentives;
   5. To influence, in a longer term, OEMs design and manufacturing strategies toward ASEV.
5. Promotion of a European ASEV toolkit for Member States, regions and cities:
   
   1. National/Regional Policies: Numerous financial/non-financial incentives to support ASEV deployment, similar to what is currently underway for BEVs;
   2. ASEVs are a very good tool for local authorities to improve their mobility system and can efficiently contribute to achieving significant performance according to the Urban Mobility Indicators associated to SUMPs;
   3. ASEVs incentives must be embodied in a systemic definition of a mobility system to ensure an excellent complementarity between all its components, be it ASEVs and non-ASEVs, public transport or scooters, bikes, etc.

What would be the impact of ASEV on decarbonisation, just transition and European industry competitiveness?

• It will provide an immediate boost to new car sales of BEVs replacing Europe on an efficient, realistic and sustainable trajectory of decarbonisation in line with the Fit for 55 and 2050 carbon neutrality targets while helping European automakers to meet both CAFE and profitability targets;
• It will foster a market proliferation of ASEVs addressing the current limited or non-existing access of middle-classes and low revenue social groups to electric cars;
• It will reconcile the average European citizen and consumer with the accelerated path towards electro-mobility needed to achieve our Green Deal’s targets;
• It will restore automotive production at a level compatible with a just transition;
• It will reactivate an “innovation playing field” (the “small car”) where the European automotive industry has been historically extremely competitive;
• It will favour the emergence of smart local mobility systems taking full advantage of their intrinsic performances.