Europe has approved a ban on the sale of combustion and hybrid cars by 2035. This measure is part of a target to reduce net emissions by 55% by 2030 and net zero emissions by 2050, forcing manufacturers and suppliers to restructure the entire value chain in a dizzying race that opens up as many opportunities as uncertainties.
Implications for industry
The powertrain industry in Europe accounts for 12% of total greenhouse gas emissions and the target for 2050 is to reduce this figure to 0%.
With this new regulation, industries are forced to reshape the entire working infrastructure, with a latent concern for the raw materials for battery manufacturing and the recharging points themselves.
Reconfiguring the whole supply chain
Producing a combustion car is a priori more complex than an electric car, whose systems and engine are simpler. However, both OEMs and all automotive tiers are facing an unprecedented adaptation of their plants and production processes. Changing these production lines to switch from combustion to electric cars is complex and has never been done at the speed required today.
Manufacturers such as Stellantis, a major player in Spain and Galicia, are already in this race, and despite reticence and uncertainties, has already set an end date of 2026 for the production of petrol vehicles, and is planning to restructure its workforce and production plants. Toyota, Honda and Nissan have already adapted sites exclusively for the production of these vehicles, by 14.18% and 22% respectively. On the other hand, the two US-based automakers, Ford (36%) and General Motors (28%), are looking to lead the world in the production of battery electric vehicles.
Raw materials and rare earths
In the complex puzzle of electric mobility, there is one component that plays a fundamental, often overlooked role: rare earths. These are 17 chemical elements such as lithium, lanthanum, yttrium, neodymium, praseodymium and samarium, which are essential for the electronics, renewable energy and electric car battery industries.
The problem is that 90% of rare earths are processed and marketed by China. Yes, once again the shadow of Asian dependence that is causing Europe so many headaches. That is why the European Commission is launching the REpowerEU plan, which is known for its plan to reduce dependence on Russian gas, but which also envisages the recovery of mining, with European standards, on our own soil. There will be no other way out.
Right now Europe is living in a contradiction that is difficult to resolve, because the continent that is most respectful of the environment and sustainability is at the same time dependent on mining, in many cases uncontrolled, in African and Asian countries. It is a modern version of greenwashing, of not polluting within our borders, without looking at what our external “suppliers” are doing.
The danger of this foreign dependence is so significant that the European Commission has already promoted the launch of up to 14 industrial projects to exploit rare earths on European soil, where there are currently no such mines.
Recharging points and consumer reluctance
The third piece of this complex electric car puzzle lies with the end consumer. While it is true that electric car sales in Europe have risen from 2.7% to 10.3%, penetration is still low, especially in countries such as Spain, where it stands at 2.7%
Consumers still do not see the advantages of these vehicles clearly at the user level, above all because of the autonomy of the batteries and the scarce network of charging points. There are currently 224,237 recharging points in Europe, and Spain has a total of 13,411 public access infrastructures. By 2021, 4,866 points will have been installed, four times less than the growth needed to keep pace with market growth.
On the other hand, public-private incentives play a key role in making electric vehicles competitive in terms of price compared to diesel and petrol, as well as initiatives such as the electric and connected vehicle grant, to finance more than 450 projects that promote innovation and competitiveness in this regard.