EU Climate Chief Says Carmakers Can Thrive in Global EV Race

(Bloomberg) -- The European Union is prepared to make sure carmakers are ready to meet its 2035 goal to effectively phase out the combustion engine, the bloc’s climate chief said, despite stiff competition from China.

The optimistic take from Wopke Hoekstra, who began a second term overseeing the bloc’s green goals last month, comes at a delicate time for the auto sector. Demand for electric vehicles in Europe has slumped, while manufacturers such as Volkswagen AG are struggling to sell cars abroad. They’re also facing strict EU emission targets and a flood of Chinese EVs at a fraction of the price.

“We will do our utmost to secure that this sector has a very bright future here in Europe,” Hoekstra said in an interview with Bloomberg Television. “There is no doubt in my mind that we will reach the 2035 target well in time.”

The most pressing short-term issue for the industry comes in the form of potential fines for missing 2025 emissions goals, which the European Automobile Manufacturers’ Association has said could be as much as €15 billion ($15.4 billion). To avoid them, carmakers in the region could “pool” with others that are further along the route to electrifying, averaging out their emissions.

Yet that would mean those selling fewer EVs compensate companies such as Tesla Inc. and China’s BYD Co. that overcomply with emissions limits. Analysts have said that may lead to a windfall for foreign manufacturers.

Hoekstra said the European Commission hadn’t yet calculated the potential penalties for carmakers, but similar targets for 2020 only resulted in one being fined a small amount. He said others that had invested heavily in EVs were “fiercely lobbying” to keep climate targets in place.

While Hoekstra vowed to stay the course on climate, he acknowledged the need to better address the concerns of companies and voters about the impact of EU policies.

Five years after Commission President Ursula von der Leyen unveiled the Green Deal as a potential cornerstone of the bloc’s growth, public support for the overhaul has shrunk amid worries about the costs of the transition and the competitiveness of the region’s industry.

In pursuing net zero, “we have been too one-dimensional,” Hoekstra said. “And therefore it is so important that we invest way more into the competitiveness side.”

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