Suppliers in Europe are also looking to answer the growing demand for EV batteries as well as become key players in the autonomous driving and connectivity sectors. Are you encouraged by what you are seeing from the supplier industry in Europe as it tries to capitalize on these megatrends?
They are really well positioned because they're their strengths are their R&D, being innovative and coming forth with solutions to solve these problems that society has and their ability to work with their customers to bring to solutions to market that end consumers want. Therefore, I think the industry is well positioned, but let's not kid ourselves, the challenges are huge. That is why we at CLEPA argue a lot with policymakers about the framework of the conditions. Are they the right ones? Do they stimulate and encourage innovation rather than stifling and blocking progress? This is where we have real worries. The targets that the European Commission is going to propose this June on CO2 emissions reduction for passenger vehicles and before the end of the year for Euro 7 pollutants are really going to determine the fate of the internal combustion engine in Europe. It's that serious.
What has CLEPA most concerned?
What we see in Brussels and in a significant number of capitals across Europel is a strong bias for battery-electric vehicles as being the one and only solution to make mobility climate neutral and the EU wants to do by 2050. It's a very difficult discussion to have and to get out of the dogmatic: "We need all to be electric." As soon as you say something else, you are classified as someone who opposes climate neutrality, which is, of course, nonsense. The supply industry is fully engaged in providing all the technologies that are needed to make the powertrain electric. Supplier are also fully in favor of the ambitions. EVs are a really good solution for many types of mobility, but it's not the only solution. Therefore, the supply industry is not trying to slow down the speed of the journey, but it should be an inclusive strategy and we shouldn't be dogmatic about one solution, which is clearly not the wisest approach. That is why we are having a lot of talks with policymakers and other stakeholders to try to help them understand the level of complexity that surrounds this topic.
A small percentage of suppliers will benefit greatly if the only powertrain option is battery electric or potentially fuel cells, while many others will suffer. What is the solution?
We will need all these technologies, even with these very strict targets for 2030, 2040 and 2050. There will still be a lot of combustion engine technology needed on the roads in the future. So, yes, electrification is a great solution, but we need a mix of technologies. To make this mix possible, policymakers should also include things such as renewable fuels in into the mix.
Does CLEPA find that it is negotiating from a weaker position because of Volkswagen Group's diesel-emissions cheating scandal. Are policymakers still upset about that and therefore are not interest in feedback about combustion-based solutions?
I think credibility has been hurt. Some actors in the Brussels bubble have really given up on the automotive industry, especially among some of the greener NGOs [non-goverment organizations]. But many also can place this into context. In previous years, also when CO2 emissions regulations were first drafted and shaped, things were simpler. You could regulate the product, the vehicle in this case, and require that it would emit less CO2. Today, with the addition of electrification, it's much more complex. You need to involve many more actors. You need the charging infrastructure, which is the responsibility of others to deliver, and you need the energy to be green and renewable. You need consumers to change their mindsets to get used to a different way of driving and to take charging into account. Then there's the technology question. Therefore, the world has become more complex and that needs to be reflected in the decisions that policymakers take. It's too simple to say, "OK, we don't trust you, so we won't talk to you." Unfortunately, that's an attitude that you see with some but not all. It's worth noting the European supply industry employs 1.7 million people across Europe. And that's on top of the 1.2 million at vehicle manufacturers. It's a huge sector. There is a lot at stake.