“The future of the last major manufacturing industry Europe still has is at stake”

Electric vehicles from Chinese manufacturer BYD, at the port of Suzhou (Jiangsu), September 11, 2023.

LWill Europe, which already fears being knocked out of geopolitical history due to the confrontation between China and the United States, also be thrown out of industrial history? We sense a metaphysical fear of this nature now floating in Brussels. This is what emerges in the remarks made, Wednesday, September 13, by the President of the European Commission, Ursula von der Leyen, to parliamentarians. Evoking a ” flood ” of global markets by Chinese electric cars, she announced the launch of an investigation into the subsidies they benefit from in their country. At stake is the future of the last major manufacturing industry that Europe still has.

Suddenly, we recall the trauma of Chinese solar panels, which killed this promising sector in the early 2000s. Customs duties had indeed been imposed in 2012, but they had to be lifted a few years later to allow countries to meet their renewable energy targets.

Will history once again force us to choose between climate and industry? This was the meaning of the warning from Carlos Tavares, the boss of Stellantis, when he deplored that the ban on the sale of thermal vehicles in 2035 in Europe would roll out the red carpet for Chinese manufacturers.

A step ahead

But this threat of Chinese peril is also an easy excuse to hide the fact that European manufacturers have fought the electric car for too long under the pretext of their competence in gasoline or diesel vehicles. They did not want to see China’s colossal investment to develop this market and build a complete sector, from the mine to the road.

Today, they sheepishly note that their competitors have a head start (at least three years) in terms of technology and costs. We must therefore urgently build dikes to stop the wave. In 2021, Chinese cars represented just 2% of electric vehicle sales in Europe. They currently weigh 8% and will exceed 10% at the end of 2023. It will be 15% in two years, ures the Commission. One in five cars sold in Europe is electric, and it is more than one in four in China, the world’s largest automobile market. So it’s time to worry.

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Launching an investigation against subsidies when you yourself grant them mively to your industry, as is the case in batteries, is probably not the most subtle solution, but it is the most consensual. In the short term, it would already be simpler to reserve aid for European vehicles, as France wants to do. But it will not be easy to make up for lost time without penalizing the energy transition. Painful dilemma.

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