European Auto Industry Calls for Tariff and BEV Target RethinkEuropean Auto Industry Calls for Tariff and BEV Target Rethink

European automakers need a strategy of protection from both rising emissions penalties and the threat of a tariff war with the U.S. and China.

That’s the message being sent in an open letter by the new president of the European Automobile Manufacturers’ Assn. (ACEA) industry representative body, Mercedes-Benz CEO Ola Källenius, to leaders of the European Union.

His letter highlights the unprecedented challenges from global competition, geopolitical tensions and a more complex than anticipated transition to electric and hydrogen zero-emission mobility.

Källenius calls for a fresh look at decarbonizing the industry that is market-driven and not just through mandates that are punishing legacy automakers with fines for missing difficult-to-achieve battery-electric-vehicle sales targets.

He also cites the need for a regulatory framework that improves competitiveness of European industry as recommended by former Italian prime minister Mario Draghi last autumn.

Finally, his letter calls for promotion of new approaches to create worldwide, mutually beneficial trade relations for the EU to continue benefiting from free and fair trade.

The ACEA stresses that the most urgent action needed to help Europe’s automotive industry is to end burdening automakers with fines over unachievable BEV sales targets for 2025, leaving many automakers having to divert R&D investments away to buying credits from foreign manufacturers.

It points to provisional European figures that indicate an almost 6% decline in new BEV registrations in 2024. Market share is also trending downward, declining 1% to 13.6%, far from the sharp increase needed to meet stringent CO2 targets in coming years.

Källenius conludes: “The European Green Deal must be subject to a reality check and a realignment – to make it less rigid, more flexible and to turn the decarbonization of the automotive industry into a green and profitable business model. Let me be clear: The EU auto industry remains committed to the EU’s 2050 climate neutrality goal as well as the shift to zero-emission transport and mobility.”