Carmakers will have to cut cost to compensate the expense, because European passenger car sales are set to drop by two percent this year after six consecutive years of growth.
FREMONT, CA: As the auto industry is facing consolidation, so the jobs will migrate to lower-cost countries. European Auto Industry (ACEA) President Mike Manley says that this will happen because companies struggle to develop cleaner vehicles in an economic downturn.
In the wake of Volkswagen's diesel pollution cheating scandal, Tighter emission rules is introduced, it is forcing carmakers to cut average fleet emissions of carbon dioxide to 95 grams per kilometer in 2021, from an average 118.5 grams per kilometer in 2017.
When European passenger car sales are set to drop by two percent this year after six consecutive years of growth, then the investment in low-emission power trains were being made. Now carmakers will have to cut the cost to offset the expense.
Manley also mentioned that the cost of low-emission hybrid and electric power trains is higher than those for combustion engine variants, so this needs to be rebalanced.
Carmakers and suppliers will need to make greater use of lower-cost manufacturing locations and seek broader partnerships to share the costs of the investment. The European Union's Green Deal should be used to empower the EU's industrial base and the global competitiveness of the automobile sector.
Any efforts to shift towards a carbon-neutral economy need to be carefully thought and reviewed. There will be unintended consequences, and employment is an example. The electric cars take less time to assemble than combustion-engine equivalents.
Taking into account social and economic dimensions, the conversion to carbon neutrality must be well managed. Mobility must remain affordable for all European citizens, regardless of where they live or their financial means. Manley called for an EU-wide network of charging points and refueling stations for both passenger and commercial vehicles.
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