In a post the other day, I noted a report in the Financial Times that the CEO of Siemens Gamesa, one of Europe’s largest wind-turbine manufacturers, had called for a minimum quota on the amount of EU-produced turbines installed in the region. The reason? Chinese competition was taking too much market share. That “green jobs” would go to China was not part of the plan.
Now this, via Top Gear:
There was a stark warning about the future of the car industry in Europe and Britain this week from Carlos Tavares, boss of the Stellantis Group that includes Peugeot, Citroen, Alfa, Fiat, and Jeep.
His concern is the speed of legislation that mandates electric-car sales before the prices have fallen or the infrastructure is available. “Freedom of mobility is going backwards because people can’t afford EVs [electric vehicles]. There is the potential for social unrest,” he tells Top Gear.
His theory is that Chinese-owned companies are subsidising sales here at the moment, which is why they are making the most affordable electric cars. “The Chinese industry might be making cars at a loss. And then they will raise prices after the European carmakers go out of business.”
He says he wants subsidies, or protection from Chinese competition via tariffs, “The same as the barriers that there are on the sale of European cars in China.” That’s not unique. Many bosses in many industries put their hands out for subsidy and protection. He pleads this is the only way to stop widespread job losses in European car factories.
Tariffs would let the European industry build up a base of raw materials supply, cell and battery manufacture as well as car manufacture. But once that “brutal transition period” to EV sales is over in 2025, he says the protectionist measures could taper off because the European industry will have established electric manufacturing.
“2025” may well be a typo (the EU’s ban on sale of new internal-combustion-engine vehicles takes effect in 2035). If not, well, the goal of building up a “base of raw materials supply, cell and battery manufacture as well as car manufacture” by 2025 looks . . . ambitious. As, I suspect, would 2035, but that’s another story.
Back to Top Gear:
If trade barriers don’t go up, [Tavares] has another solution. CO2 can be cut by allowing cheaper small combustion or hybrid cars to be sold new for a few more years. “The politicians decided dogmatically. They decided voters want EVs. We don’t have regulations that are technology-neutral.” In other words, they wanted to cut CO2 and decided EVs are the way to do it, rather than just asking for the CO2 cut and letting the car makers figure out the best way.
The “politicians decided dogmatically.” They decided voters want electric vehicles (EVs), which, presumably is why they felt it necessary to ban alternatives, in case, presumably, voters did not want EVs, you know, quite enough.
Central planning is what it is.
Tavares has expressed his doubts before about the way that EVs are being introduced (I wrote about that here and here).
It’s worth repeating again some comments he made in January (via Carscoops):
“What is clear is that electrification is a technology chosen by politicians, not by industry,” Tavares told a handful of European newspapers in a joint interview. “Given the current European energy mix, an electric car needs to drive 70,000 kilometres to compensate for the carbon footprint of manufacturing the battery and to start catching up with a light hybrid vehicle, which costs half as much as an EV (electric vehicle).”
Central planning is what it is.
And greenflation will be what it will be.
This report from Automotive News Europe gives more detail on Tavares’s views on the possibility of social unrest:
“The dogmatic decision that was taken to ban the sale of thermal vehicles in 2035 has social consequences that are not manageable.”
Tavares said forcing a transition to electric vehicles (EVs), which are more expensive than fossil-fuel or hybrid equivalents, will make car ownership unaffordable for many.
“If you deny the middle classes access to freedom of movement, you are going to have serious social problems,” Tavares said.
Those fears may be overdone, at least so far as the initial aftermath of the ban is concerned. Even after 2035, people in the EU will still be able to buy old internal-combustion vehicles, offering the prospect that Europe’s cities will, in automotive terms, be turned into kinds of Havana, at least until climate policy-makers, quite a few of whom are not keen on too much mobility anyway, decide to change the rules again.
A more likely source of trouble before then may come from the (often highly skilled) workers who will be thrown out of work as EVs, whether from China or elsewhere, obliterate conventional auto manufacturing and, indeed, the businesses that support it (components manufacturers and so on). EVs, it should be remembered, are relatively easy to manufacture.
I’ll also re-up this extract from a Financial Times story from December:
Half a million jobs would be at risk under EU plans to effectively ban combustion-engine cars by 2035, according to European auto suppliers, the latest in a series of stark warnings about the costs of a rapid transition to emissions-free technology.
More than two-thirds of those 501,000 roles would disappear in the five years before that date, according to a poll of almost 100 companies for the European Association of Automotive Suppliers, Clepa, making it difficult to mitigate the “social and economic impacts” caused by mass unemployment.
But the survey by PwC also found that 226,000 new jobs would be created in the manufacturing of electric parts, reducing the net number of job losses to approximately 275,000 over the next couple of decades.
Much will depend on where the cars are manufactured. I also wonder how well those (generally lower-skilled) jobs will pay.
Back to December’s FT:
Carlos Tavares, chief executive of Stellantis, told a Reuters conference on Wednesday that the speed of the transition to electric cars was “putting the industry on the limits”, adding that the costs of developing the new technology could lead to heavy job losses.
His warning followed a similar claim from Germany’s largest listed car parts supplier, Continental, which cautioned that “social harmony would be jeopardised” if climate policies were not accompanied by programmes to create new employment opportunities for those working in fossil fuel-reliant industries.
Programs to create new employment opportunities. Bound to work well.