Europe steps up electric-car push to close gap with China

By BLOOMBERG

BRUSSELS • Electric-car production in the European Union (EU) got a spur yesterday as EU regulators acted to close a technological gap with China by seeking stricter emission curbs on manufacturers such as Volkswagen AG and Fiat Chrysler Automobiles NV.

The European Commission, the EU’s regulatory arm, proposed a 30% reduction in car discharges of carbon dioxide (CO2) by 2030 compared to 2021 levels, as part of a stepped-up fight against global warming. The plan, which will progressively tighten existing CO2 limits, features incentives for automakers to shift to electric vehicles (EVs).

“There’s a component of trying to facilitate the development of a powerful car-manufacturing industry of EVs,” Miguel Arias Canete, EU climate and energy commissioner, said in an interview on Tuesday in his Brussels office. “There will be a race for developing clean-energy vehicles. We are seeing that others are taking the global lead.”

As China expands its EV prowess with the blunt policy of quotas, Europe is counting on a more nuanced approach that would force carmakers to choose between making the combustion engine cleaner or abandoning it in favour of EVs.

“If you see what’s happening in the US and you see the figures of Tesla production in 2016 the production of Tesla cars was around 80,000 cars,” Canete said. “The big problem is China, which has a mandatory target of 10% in 2019, 12% in 2020 and 7.5 million vehicles per year in the future.”

The Chinese market already boasts 400 types of EVs, whereas Europe has six, according to Canete. India, meanwhile, aims for all new passenger cars sold by 2030 to be electric. “If you see the figures from the EU, at the moment it’s 1% of the fleet,” he said. “There is a huge gap between the EU, which invented the car, and developing countries,” Canete said. “This proposal has this element of incentives in order to induce car manufacturers to come along with a substantial number and a substantial variety of EVs.”

The commission proposal, which will need the approval of EU governments and the European Parliament in a process that usually takes more than a year, also includes €800 million (RM3.92 billion) for the development of infrastructure to charge electric autos, Canete said.

The planned incentives for EV production will take the form of credits against the stricter CO2 targets. The EU’s current caps on CO2 from cars are 130g a kilometre set for 2015 and 95g fixed for 2021.

The existing limits are averages for the EU fleet as a whole, with individual manufacturers having specific targets backed by financial penalties. The system of penalties for breaches will remain in place for the 2025 and 2030 limits, according to Canete.