Bosch issues warning over impending fuel prohibition
The impending ban on combustion engines in Europe, set for 2035, is set to bring about significant economic, industrial, and environmental changes within the automotive sector, as warned by automotive supplier Bosch and other industry voices.
This ban, while aimed at reducing greenhouse gas emissions, could lead to severe disruptions to the European automotive industry's business model and revenues. Many manufacturers rely heavily on combustion engine vehicles for their current earnings, which fund investments in new technologies. The abrupt ban risks undermining this financing structure, potentially weakening Europe's auto industry competitiveness.
Moreover, the shift to electric vehicles (EVs) is not expected to be smooth or immediate. New costs for companies include replacing fleets, expanding vehicle charging infrastructure, and managing the environmental impact of battery production and EV manufacturing lifecycle emissions.
The ban also raises concerns about innovation and technological diversity. Leading suppliers like Mahle argue that banning internal combustion engines (ICE), including hybrids or “green” ICE technologies, could stifle innovation. This could impair Europe's position as a global automotive technology leader and harm economic recovery.
Environmental and regulatory complexities also loom large. Although EVs significantly reduce greenhouse gas emissions over their lifecycle compared to combustion engines, the mining and production of batteries raise environmental concerns. Moreover, millions of combustion engine vehicles sold before 2035 may remain in use for years, potentially shifting emission problems globally without further regulations.
In addition to these challenges, proposed earlier mandates for corporate and rental fleets to adopt 100% electric vehicles by 2030 could increase transition costs and regulatory burdens for businesses, intensifying the impact on fleets critical to transport emissions reduction.
Beyond job losses, these consequences require careful policy designs to mitigate adverse effects while advancing climate goals.
Meanwhile, Bosch, despite warning against the ban, plans to invest heavily in India, including in the area of electric mobility. The vice president sees India as a place to exploit potential for future success, given its expected growth as the third-largest automotive market in the coming years. Air conditioners are identified as a potential need in India, further highlighting Bosch's focus on electric mobility solutions.
As the automotive industry navigates these challenges, it appears that companies are looking to focus their hopes on other countries rather than Europe. The consequences of the EU's ban on combustion engines are indeed severe, and the industry will need to adapt swiftly to remain competitive and sustainable.
[1] European Automobile Manufacturers Association (ACEA). (2021). The Impact of the Proposed 2035 Ban on Combustion Engine Vehicles in the European Union. Retrieved from www.acea.be
[2] International Council on Clean Transportation (ICCT). (2020). Life-cycle Emissions of Electric Vehicles in Europe. Retrieved from www.theicct.org
[3] Transport & Environment. (2021). The 2035 Ban on Combustion Engine Vehicles in the European Union: Impacts and Policy Options. Retrieved from www.transportenvironment.org
[4] Mahle. (2021). Mahle Warns Against the Proposed Ban on Internal Combustion Engines in the European Union. Retrieved from www.mahle.com
[5] European Commission. (2021). European Green Deal: Fit for 55 - Towards a climate-neutral Europe. Retrieved from ec.europa.eu
- The ban on combustion engines in Europe may disrupt the business model and revenues of the European automotive industry, as many manufacturers heavily rely on combustion engine vehicles for earnings to fund innovations.
- The shift towards electric vehicles brings new costs for companies, such as replacing fleets, expanding charging infrastructure, and dealing with the environmental impact of battery production and EV manufacturing lifecycle emissions.
- The European automotive industry's competitiveness could be weakened if the financing structure for new technologies is undermined, potentially stifling innovation and reducing Europe’s global position as a leader in automotive technology.
