The automotive sector is a powerhouse of the European economy. It is a major employer, not only in the manufacture of cars, but also in the service jobs it creates. But it faces major challenges.
Its products are associated with air pollution in our cities and with climate change. Public confidence was badly shaken by the Dieselgate scandal.
Around the world, competition is getting fiercer and new players are emerging to challenge Europe’s leadership.
If Europe is to retain its leading position, the industry must adapt, and adapt rapidly.
The way ahead is already clear: after dominating for more than a century, the internal combustion engine in the upcoming years has to be consigned to the museum.
We cannot move around, particularly in crowded cities, leaving behind a trail of noxious gases and accelerating climate change.
The future of transport must be zero emission. We have the technical solutions to make this happen, but for it to happen in reality authorities on different levels and industry must work together.
Just few weeks ago, the Commission adopted a long-term strategy to create a climate neutral economy by 2050, by investing in innovative and realistic technological solutions and by supporting research and improving access to finance.
But we cannot afford delay. Around the world our competitors are investing in key technologies for the cars of the future.
We cannot allow ourselves to be left behind in the manufacture of components which are vital to the zero-emission vehicle of the 21st century.
That is why we have already created the European Battery Alliance.
But before we talk too much about the technology, we must think about how we will get from today’s situation where nearly every vehicle on the road is fossil-fuel powered to a future where zero-emission vehicles are the norm in a very short period of time.
Who will build these vehicles? How will people be persuaded to buy them? Where will they refuel? It’s a chicken and egg problem, and that is why authorities have to play a catalytic role in over-coming the difficulties of transition.
The Commission proposed a framework for achieving clean mobility in 2017. This sets ambitious CO2 targets for 2025 and 2030, but leaves choose of the technology open. Thus industry has both the incentive to make innovative steps and the time to adapt.
Incentives cover zero-emission vehicles, such as battery electric or fuel cell vehicles, and low-emission cars mainly plug-in hybrid vehicles equipped with fossil fuel and electric motors.
So why are we still supporting the development of vehicles that burn fossil fuels? The answer is simple: we live in the real world, where we cannot achieve such a massive change overnight.
The millions of vehicles on the road today will continue to circulate for years to come it would be environmental and economic madness to scrap them all now.
We have millions of skilled workers who need retraining to produce the new generation of vehicles. Neither industry nor society is ready for a big bang approach, but at the same time we have to make sure that we will be able to adapt to the ever-changing reality.
Hybrids also help address the transitional infrastructure problem. Recharging is a major concern for anyone contemplating buying a fully electric vehicle, but as hybrids become more common, there is an economic case for building more charging stations, which makes the choice of an all-electric vehicle more attractive.
And of course the batteries that power a plug-in hybrid can also be used in all electric cars. It’s win-win.
But we don’t expect the market to work its magic instantly. The Directive on the deployment of alternative fuels require EU Member States to kick-start the rollout of the alternative fuelling infrastructure.
Coordination at the EU level is essential if citizens are to drive across borders.
Which brings us to the most important element in the transition: the citizen. Public concern about global warming is rising, while the health hazards of particle emissions have been in the spotlight since the beginning of the Dieselgate scandal.
Many people want to change to emission-free vehicles. But they will not be coerced to do so by what are seen as punitive measures. We need to show that there is a clear path forward. We need carrots, not sticks.
I said at the beginning that the automotive industry is a key element of our economy.
But in the car of the future, the most high value element will be the battery.
The race to develop powerful, lightweight and durable batteries is already on, and Europe has been a late starter.
We need action to catch up with manufacturers, particularly in Asia, who look set to dominate the market. Battery technology must be developed in Europe, if we want to remain a global leader in the automotive industry.
We must do everything in our power to be able to still drive European cars in ten or twenty years from now.
This is why the Commission, together with Member States and industry stakeholders, launched the European Battery Alliance in October 2017, followed by the Strategic Action Plan for Batteries in May 2018.
The Action Plan covers all aspects, investment, research raw materials, skills, standards everything needed for a globally competitive battery industry.
Concrete results are emerging. For instance work has already begun on a demonstration line in a project led by Northvolt of Sweden (with a €52.5 million EIB loan), while Umicore will invest in Poland’s Nysa to produce cathode materials.
We know where we want to get, and we have planned our route to get there. Now is the time for concerted action.