Car industry calls for shift in EU emissions targets amid slowing EV sales

Europe’s car industry has called for the relaxation of EU emissions targets after sales of electric cars stalled further in August, adding to growing political pressure that threatens to slow the transition away from fossil fuels.

The European Automobile Manufacturers Association (ACEA), a lobby group, said that its members could face “multibillion-euro fines” because the shift to electric production has not been quick enough to meet the EU targets.

Italy’s prime minister, Giorgia Meloni, on Wednesday criticised the EU for “self-destructive” policies on shifting to electric production and vowed to make a push to change them. Germany and the Czech Republic, two of the largest manufacturers of cars and parts, have also been increasingly vocal in asking for the rules to be relaxed.

The overall European car market has been struggling. The number of cars sold in the EU fell to 643,000 in August, down by nearly a sixth compared with last year, according to the ACEA.

However, sales of electric cars fell more rapidly, by 44% compared with August 2023. The industry claims that the reason for the fall is because consumer demand has not risen fast enough, although some analysts say that manufacturers failed to invest early enough in switching to electric production and overestimated the prices they could charge.

Car sales figures can be more volatile over the summer as activity dips in some countries. However, the market has been struggling over the course of the whole year, amid economic problems such as rising interest rates.

Sales were dragged down by Germany and France in particular. Germany, the EU’s largest economy, has been teetering on the edge of recession for two years, pushing Germany’s Volkswagen this month to consider closing a German factory for the first time ever. Meanwhile, France is also dealing with extended political uncertainty.

Electric car sales have been under particular pressure in 2024. One major factor was Germany, the EU’s largest car market, withdrawing attractive subsidies at the start of the year.

That decision came just as demand for electric cars started to plateau. New electric cars are still, on average, more expensive upfront than their petrol or diesel counterparts – even if owners will save significant amounts of money over their car’s lifetime.

Felipe Muñoz, a global analyst at Jato Dynamics, said that its data for sales across 28 European markets indicated that overall sales could fall during 2024 compared with 2023.

“The industry is going to face further challenges in the coming months,” said Muñoz. “Buyers are still grappling with the pressure to make the switch to electric and EVs continue to be more expensive than already-pricey combustion engine cars.”

The ACEA’s board argued on Thursday that EU emissions rules had not adjusted to “the profound shift in the geopolitical and economic climate over the past years”. As well as the economic stagnation in Europe, Chinese manufacturers such as BYD, Geely and SAIC are pushing to increase European sales.

The industry could be forced into “unnecessary production cuts, job losses, and a weakened European supply and value chain at a time when we face fierce competition from other automaking regions,” the ACEA said.