European Auto CEOs Divided Over CO2 Limits and Tariffs

There are two major risks facing the European automotive industry. On one hand, there is just over a year left for manufacturers to face the new emission limits imposed by Brussels, which will set them at an average of 93.6 grams of CO2 per kilometer traveled – the individual quota varies for each manufacturer – about 15% stricter than the current ones. Failure to do so could result in fines totaling between 12,000 and 15,000 million euros.

On the other hand, there are tariffs on Chinese electric cars, approved on October 4 – less than a month remains until they are implemented if the EU and China do not reach an agreement – in an environment where sales of this type of propulsion are only losing market share. Therefore, at the Paris Motor Show, these were the two topics on everyone's lips among journalists and automotive executives.

"We have shown that Europe can compete with China," said the CEO of the Renault Group, Luca de Meo, under whose leadership the French consortium developed the Twingo, a compact electric car priced around 20,000 euros, in just two years. "We had to learn from them how to manufacture electric cars," he noted in a meeting with journalists attended by ABC.

"The problem with Europe is that every engineer believes they have the secret formula, while the Chinese develop the car around parts that are already created." For De Meo, Europe's advantage lies in small cars, "ideal for our medieval streets. The Chinese are developing C and D segment SUVs, they are two different spheres." The Italian executive noted that electrification has been "a risky bet" for his company, and the French factories, which have become Renault's zero-emission hub, "will have problems if sales do not improve."

For the CEO of the BMW Group, Oliver Zipse, the only way to avoid the Old Continent's dependence on batteries from China – CATL and BYD are the world's largest battery manufacturers – is to review the 2025 CO2 targets, an opinion shared by Luca de Meo, and reverse the ban on thermal engines in 2035. "This decision threatens the foundations of the European automotive industry. Although BMW and Mercedes-Benz are on track to stay below the 2025 thresholds, Volkswagen, Renault, and Stellantis could exceed them and would have to buy credits from other companies, like Tesla, to avoid penalties.

The CEO of Stellantis, Carlos Tavares, was confident they would meet the targets without having to turn to other manufacturers. This would mean achieving a sales mix where electric vehicles account for around 20% of the total. Moreover, from his point of view, reviewing these targets would only be detrimental to the automotive sector. "Every second we spend pausing is time we lose in improving." Staying competitive on a global scale is one of the priorities of the Portuguese executive, who recently created a joint venture with the Chinese brand Leapmotor to sell and manufacture their electric cars around the world. "The harsh reality is that our Chinese rivals build electric cars at a third of the cost we do."

"Yes, it is true that 2025 is going to be a difficult year, but what is this compared to our planet on fire? Where is the ethical responsibility? Where is the courage?" he asked.