European auto manufacturers call for urgent progress on automotive package

The European automotive industry is calling for substantial progress in negotiations on the automotive package so that it can be finalised early next year. Vehicle manufacturers and the wider value chain need that certainty now.

“European vehicle manufacturers are successfully accelerating their transformation towards zero-emission mobility. Now it’s time for the EU to reform the legislative framework so that it will help achieve the triple goal of decarbonisation, economic security and job preservation”, said Ola Källenius, ACEA President and CEO of Mercedes-Benz, following a meeting of the ACEA Light Duty Vehicle Board in Brussels. 

In sync with the progress made towards a more balanced and sustainable trade relationship with China, it is time to ensure that the “automotive package” creates pragmatic, competitive conditions for the industry’s transformation within Europe. Targets with penalties cannot deliver it.  A market-based transformation needs other important ingredients: respect for consumer choice, maintaining jobs, and sufficient time to realise investments into new value chains to increase Europe’s resilience. 

A workable, long-term policy framework must provide industry with realistic conditions and flexibilities to reach CO2-emission reduction targets, recognising also the role of renewable fuels and green materials. Along the way, a well-calibrated five-year “averaging” mechanism that starts in 2028 can provide the most effective electric-vehicle incentive Europe can offer: it will cost national budgets nothing, yet will reward every early sale. The trajectory for vans, furthermore, must be adjusted, as this segment starts from a lower base than cars.  

The Industrial Accelerator Act should offer a feasible implementation timeline in line with supply chain realities. The IAA should also provide additional incentives for vehicle manufacturers to localise: all “made in the EU” battery-electric cars and vans must receive super-credits, with additional credits for small cars and vans. The geographic scope of the IAA must consider investments made by ACEA members in neighbouring countries and find a way to include the UK.