The continuous evolution of the global automotive industry has recently accelerated. In the coming decade, important changes are expected in several areas that are likely to profoundly reshape the industry and its markets worldwide.
While the European market has a low-growth perspective, third markets are growing fast, changing the trade flows and the automotive value chain. The intense competitive pressure is growing further and EU companies are increasingly being challenged on their home market. To meet long-term greenhouse gas targets as well as air quality objectives, the internal combustion engine will be further improved and the development of breakthrough technologies, such as electrified propulsion, will happen. Sizeable efforts will also need to be made with the further development and distribution of alternative fuels to traditional diesel and gasoline fuels.
The Interim Report of the CARS 21 High Level Group contains policy recommendations on a limited number of topics. The key messages from this report, as stated in the Executive Summary are the following.
Ensuring a favourable business environment
Ensuring reliable and favourable framework conditions and continuous improvement of those conditions are a prerequisite to ensure the long-term competitiveness of the European automotive industry.
The cumulative effects of the different pieces of legislation affecting the automotive sector should be scrutinized in order to have an overall assessment of their economic, social and environmental impacts.
In order to achieve ambitious goals in relevant policy areas a real integrated approach must be fully implemented. Measures to be taken must be proportional and in line with the principles of cost-effectiveness and better/smart regulation.
Fostering business adaptation and employment transitions
The economic crisis underscored the importance of the industry for the European economy and the need to keep the automotive manufacturing base in Europe. Policy makers on all levels can contribute to this by a close coordination of the different policy areas having an impact on the sector and by taking into account their impact on competitiveness and sustainable growth.
Anticipation of change and restructuring is vital, it should be holistic and respect all factors influencing the competitiveness and the long-term perspective of companies. It should be integrated effectively in companies' long-term strategies with due attention paid to human resources skills and availability. The Commission should encourage more policy coordination, utilisation of dedicated instruments of social policy and the development of mechanisms of forward planning of employment and skills needs, like the European Automotive Employment Skills Council.
Improving environmental & market performance
A new test method for measuring emissions and fuel consumption should be developed that is more representative of real-world driving. The modalities for its inclusion into the EU legal framework, including the adaptation of the CO2 targets established on the basis of the old method, and the timetable for introducing them need to be properly addressed, minimising the burden for all stakeholders.
This should be complemented with measures controlling pollutant emissions of vehicles in use, based on a thorough analysis, with the aim of delivering a timely reduction of real-world pollutant emissions, hence, contributing to improved air quality.
To reach the long-term CO2 reduction objectives, a comprehensive approach should be developed for the reduction of CO2 emissions from heavy-duty vehicles, covering a wide range of measures. As a first step an appropriate methodology for evaluating the CO2 emissions of the entire vehicle should be put in place. In considering different measures, it should be acknowledged that different types of vehicles have different levels of societal utility.
As part of an integrated policy approach to ambient noise reduction, vehicle noise emission regulation should be amended. The new test procedure should be implemented to better reflect real-world emissions. A further reduction of vehicle noise levels is feasible and will be proposed. Appropriate 'lead-time' should be provided to industry, consistent with the extent of the required technical adaptations.
Financial incentives for clean vehicles put in place by Member States should be coordinated more strongly in order to maximise their effectiveness and limit the fragmentation of the market. They should avoid being technology-specific, instead relying on objective and commonly available performance data, such as the CO2 emissions from the vehicle.
In order to ensure vehicles and their components are safe and compliant with relevant legal requirements, the vehicle-approval framework should be enhanced to include provisions for checking products on the market in areas where a need has been identified. This will contribute to establishing a level playing field among all actors and to increased trust of consumers in effective product regulation, while limiting administrative burdens.
Improving competitiveness on global markets
EU trade policy should take full account of the importance of maintaining a strong and competitive automotive manufacturing base, using both multilateral and bilateral tools. Both should tackle key issues of removing tariff and non tariff barriers. Free Trade Agreements should aim at full tariff dismantling and removal of Non-Tariff Barriers. The overall impacts of each trade negotiation should be assessed.
It is necessary to reform the 1958 UNECE Agreement (on the international harmonisation of vehicle regulations) with a view to make it more attractive for third markets. As part of this reform, the introduction of an international system for the approval of entire vehicles should be promoted by all relevant stakeholders.
Multilateral regulatory cooperation under the UNECE framework should be complemented with bilateral regulatory cooperation in particular with emerging countries, but also with, for example, the United States - under the Transatlantic Economic Council - and with Japan.
Preparing tomorrow's mobility solutions
A portfolio of alternative fuels, covering electricity, hydrogen, biofuels, synthetic fuels, methane, and LPG, is necessary to meet the policy objectives. Given the novelty of some fuels, their performance should be kept under review. The roll-out of alternative infrastructure should be in step with the technological development to enable the market penetration of vehicles powered by these alternative fuels.
In view of the National Renewable Energy Action Plans, the freedom of movement and the integrity of the Internal Market should be ensured to avoid different rates of biofuel blending to be used in different Member States. This should be kept under review. Compatibility with vehicles and clear information for consumers should be ensured.
Charging of electric vehicles is expected to be performed mainly at home/work, but there will be also a need for publicly accessible recharging infrastructure. In order to ensure interoperability across the EU, standardisation on the European level is needed. Based on the current EU electricity mix, substantial CO2 savings can already be obtained. In the longer term, the progressive decarbonisation of electricity generation, complementary to the roll-out of electric vehicles offers the perspective of a growing number of low CO2-emission vehicles.
In view of the importance of the industry for the EU economy, there should be significant support for research and innovation for a broad range of automotive issues and critical future technologies in the new EU policy framework for research and innovation (Horizon 2020 with the proposed budget of € 80 bn), with a focus on the key technologies required for CO2 reduction and the introduction of alternative fuels. In addition, a specific and major initiative on breakthrough technologies (including electrification of combustion engines, hybrid and electric vehicles, fuel cells, electrical and electronic systems) should be envisaged, in parallel with the continuous EIB support to the automotive sector as well as to infrastructure and services.