European Union makes cars unaffordable'
INTERVIEWCarlos Tavares, the CEO of the large Stellantis car group that includes Opel, Peugeot, Fiat and Jeep, fears that new cars will become unaffordable for the general public. This is largely due to 'insanely strict rules' from the European Union, he warns. 'Personal mobility threatens to become a luxury and that should not happen. If I were a car buyer now, I would revolt.'

The danger that fewer and fewer people in Europe can afford a new car is increasing by the day. With that warning, Carlos Tavares, the chairman of the global car group Stellantis, deliberately puts a magnifying glass on the European Union's 'dramatically strict measures', according to him.

After all, the EU has finally decided that new cars must be free of exhaust gases from 2035 at the latest. In practice, this means that the car industry has to make all its models electric at a killer pace. "That operation costs an extremely large amount of money and the customer will definitely feel that."

Carlos Tavares has a modest, modest appearance and is known for his tactful way of working. But make no mistake: the 64-year-old Portuguese is increasingly not mincing words. In conversation with this newspaper, he calls the rising car prices a direct result of the regulatory pressure from the European Union.

“These measures have been proposed by politicians who should stand up for their voters. Instead, they invent too many little rules that make the lives of ordinary, hard-working Europeans more difficult. As a voter I would be concerned and ask my representatives how important they think my personal freedom of movement is.

Disappearing car models
Because yes, according to Tavares, that 'personal mobility' is under pressure. “In my opinion, current policy has little to do with climate goals, but mainly with the desire of politicians to change our way of life. It seems as if the EU is out to get the common man or woman out of the car. The rules limit citizens in their freedom, in the ability to go where and when we want. And that has to stop, because that freedom is a great good.

It is obvious that a top executive from the car world will dig in his heels when his company has to deal with stricter rules. Because of the stricter requirements that the EU sets for cars in the field of safety, fuel consumption and the emission of harmful substances, companies such as Stellantis are selling fewer cars.

But Tavares, a veteran of the auto world with his 41 years of experience, points out that automakers have had to screw more and more environmental technology and safety systems onto their cars in recent years. As a result, the truly affordable new car has already disappeared. Even the smallest models such as a Mitsubishi Space Star or a Toyota Aygo X sometimes cost twice as much as their predecessors.

Another direct consequence: because the car companies have to free up money for the accelerated development of 'emission-free' models, existing models are being scrapped. Stellantis brands Peugeot, Opel and Citroën have already removed their 108, Karl and C1 from the price lists respectively, while competitors Volkswagen, Seat and Skoda did the same with the Up, Mii and Citigo.

This development will continue in the coming years, for example, at the beginning of 2023, Ford will draw a line through the beloved Fiesta, which must 'make room for a compact electric car'. As a result of these kinds of interventions, prices are rising even faster. Instead of relatively cheap models with a fuel engine, the consumer will soon be irrevocably stuck with an (usually more expensive) electric alternative.

Smoother transition
Carlos Tavares looks at it with sorrow. “The average car buyer cannot switch to electric without a struggle, because the cars are often still too expensive and the infrastructure is inadequate. We still have a lot of work to do to bring the price of electric vehicles to the same level as cars with a combustion engine. But in Brussels people seem deaf and blind to that reality."

The Stellantis boss therefore argues for a smoother transition to emission-free driving, in which politicians do not lose sight of the wallets of the middle class. For example, he thinks that the future Euro 7 emission standard, of which the European Commission has now sent a proposal to the European Parliament, should 'immediately go into the trash'. “Why would you oblige automakers to put expensive technology in cars that only save a little bit of fuel, when we are no longer allowed to sell those cars a few years later because of the ban on internal combustion engines? And in the meantime the consumer is presented with the bill. Those are rules to drive you crazy.”

If the European Union is to reduce the average CO2 emissions of the vehicle fleet, Tavares sees a different solution. “Then they can also stimulate the current models with hybrid technology. The average car in Europe is currently about twelve years old, with average CO2 emissions of more than 200 grams per kilometre. If you give car buyers the opportunity to switch to a newer model more cheaply, for example with subsidies, they will do so. You will then see that the average emissions of the vehicle fleet drop in no time to around 100 grams per kilometer. That's half!"

Competition from China
Meanwhile, Tavares sees new, and sometimes very strong, competitors advancing from China in Europe. Of course, that also concerns him, he says. Was that why he spent so long visiting the Chinese Build Your Dreams during the Paris Motor Show? Tavares: ,,As you know, we work well with BYD, they are one of the suppliers of batteries in our electric cars.''

The Stellantis CEO brings it diplomatically, but he also knows better than anyone that the giant concern from Shenzhen (BYD is the largest manufacturer of electric vehicles in the world) has now set its sights on Europe. The Atto 3, Han and Tang models are direct competitors for Stellantis cars.

The CEO therefore advocates stricter rules for Chinese car brands that want to set foot on European soil. “I think they should have the same admission requirements for our market as we have to be able to deliver to China. That competition is now unfair."

He also thinks it would be unwise for the EU to open its gates wide to the Chinese. “We should not want the Chinese industry to force European manufacturers to their knees first and then raise prices. If they gain too much market share, it could have terrible consequences for European automakers, the workers in our factories, but also for the car buyer in Europe. We have to take that very seriously.”

The industry responds: 'Less rules, but also take responsibility' The
trade organization RAI Association is also concerned about the affordability of mobility, says chairman of the Passenger Cars Section Huub Dubbelman: 'The Dutch are already buying fewer new cars; this year we might reach 320,000 units, while the Dutch market should normally be good for 450,000 units per year. We advocate 'technology-neutral solutions' that stimulate electric cars, but also economical hybrids, plug-in hybrids and hydrogen models. Moreover, the Netherlands must get rid of the enormous tax burden on cars.”

Sigrid de Vries, the originally Dutch director of the association of European car manufacturers (ACEA), argues for unambiguous regulations. “The regulatory burden is very high for car manufacturers. Consistent regulation is important to be able to invest every euro meaningfully. This is under pressure with the upcoming proposals for Euro 7, which threaten to undermine the transition to electric and emission-free. Europe needs a strong industry to achieve policy goals and guarantee employment and innovative power.”

Spokesman Maarten van Biezen of the Electric Drivers Association responds critically: “History repeats itself. With every previous tightening of emission requirements, the car sector screamed bloody murder. And the standard always turned out to be easily met. Fortunately, the situation is different now; most car manufacturers such as Ford, Volvo and Volkswagen have already changed course, if only because the Chinese competition is rapidly approaching.” Van Biezen sees 'a broad consensus' that around 2025 it will be much cheaper to produce an electric vehicle than a fuel car. “With electric models, manufacturers don't have to bring in hundreds of extra parts from every nook and cranny of the world. But some car manufacturers want to milk their fossil production lines as long as possible. So much so that they even have a (development-wise, ed. ) very expensive variant if the car with combined fuel and electric motor (the PHEV, or a plug-in hybrid) wants to promote. While the climate requires all cars to be zero-emission by 2050. All new cars must be this by 2035. Maybe also something for Mr. Tavares to take responsibility.”