The proposed Euro 7 pollution regulations could force automakers to close factories in Europe, Luca de Meo, the new head of the European lobbying group ACEA, said, adding that investment to meet the rules would be better allocated to increasing electric-vehicle adoption.
De Meo, the CEO of Renault Group, gave his first address as head of ACEA on Tuesday. The organization has been shaken by the departure last year of Stellantis, Europe’s second-biggest group by volume after Volkswagen, as well as Volvo Cars.
The European auto industry is at a crossroads, de Meo said, facing pressure from regulators to sell only zero emission cars by 2035 while facing competitors from the U.S. and China with favorable trade measures.
"They are not banning or regulating, but rather massively stimulating their industries," de Meo said, as he urged European regulators to respond to U.S. President Joe Biden’s Inflation Reduction Act, or I.R.A., which seeks to lure electric vehicle suppliers with $370 billion worth of clean-technology subsidies.
European governments have criticized the I.R.A. as a protectionist measure.
De Meo described as "asymmetrical" the business and technological environment facing European automakers. "We've been open to welcoming newcomers," he said, noting that domestic automakers were losing share in Europe, "but are we properly watching out for the reciprocity principle that should normally regulate global trading architectures?"