Editor's letter: Action needed to save European car industry

“Stop being naïve and dogmatic.” That’s some statement to Europe’s political leaders from Stellantis CEO Carlos Tavares on legislation in favour of EVs, but then he’s never a man to pull his punches. Tavares’s ire isn’t only at the decision itself, which he believes is pricing the middle classes out of new cars, but also at the perhaps even greater consequence of it that was allowing Chinese companies to come in and undercut the electric cars of native European companies while we’re in this transitional phase. And given that, as Tavares believes, the Chinese have a 10-year head start on we Europeans in making electric cars, plus their control of the supply chain and raw materials, this makes the issue an existential one for car makers here in face of the sometimes state-backed opposition. The solution, according to Tavares, is to either impose tariffs on Chinese cars or to offer favourable subsidies on European ones. These would stay in place until 2035, by which point the gap should have been closed and European companies could go off and compete globally on an even footing. Given that western cars have long since attracted tariffs in China, Tavares sees this arrangement as fair game, especially as he believes that Chinese electric cars will soon start at as little as €25,000 – prices that European companies simply can’t compete with. He points to Scandinavia as “a weak link” in the European industry “as they’re brand-agnostic” and therefore far more receptive to Chinese cars. “That’s why China goes there,” he says. “They’re aggressive with pricing, and I can’t see them making a profit there.” The long-term play, according to Tavares, is for Chinese companies to undercut European companies and happily make a loss, knowing that they can up their prices when the traditional competition is seen off. To that end, Tavares drew a parallel with the airline industry, saying: “Fifteen years ago, you could fly to Lisbon with your family for €150. The low-cost carriers killed off the others, and now they will charge you €500 or €600. “If China wants to do that, we need to create conditions to compete properly. Impose on them what they impose on us. It’s reciprocal, it’s fair.” Is anyone listening, though? Tavares had dinner with French president Emmanuel Macron on Sunday night on the eve of the Paris motor show to make this point. “It was a lively discussion,” he said, hardly containing the understatement. As Tavares pointed out, to introduce electric cars properly would have been a strategy decades in the making. “To switch from 80% fossil fuels for energy to 80% green energy takes 20 years,” he said. “By far that is the biggest lead time. Pragmatically and strategically, that should have been done first, as energy is the longest lead. “Then the charging network. If it takes 50 minutes to charge an EV and five minutes to fill a [petrol or diesel] car, you need 10 times more charging points than we see [pumps] today. How long to set that up? Ten years. “So 20 years for energy, 10 years for infrastructure. Then give us five years to build the EVs. The sequence is clear: energy, infrastructure, then the gun to the head to build EVs. We did this upside down.” This is a decision that Tavares again called “dogmatic”, saying that “without a layer of pragmatism”, there “will be social unrest”. He suggests for that layer of pragmatism another way out of this existential crisis: to allow car makers to continue to sell the clean, efficient, highly developed and sophisticated mild-hybrid ICE cars of today. “Remove dogmatism, add pragmatism,” he said. “Give a low-CO2 hybrid car [as an option] for 2035 to 2040. “Cars are on average 12 years old now. Twelve to 15 years ago, average emissions were above 200g/km. Today, for an affordable €15,000-20,000 price, you can sell a B-segment car with a mild-hybrid [engine] with below 100g/km profitably. “Do this and you reduce emissions by 50%, you remove unrest, you remove stress on the supply side and you ease the transition. “There are solutions; it’s not rocket science. Protect the European industry to 2035, then remove barriers. And in the transition, offer a pragmatic solution on hybrids to reduce emissions.” Common sense, it would seem. But to repeat my earlier question: is anyone listening?