Tavares EU CO2 Critique Finds Support, But Environmentalists Disagree.
“What is clear is that electrification is a technology chosen by politicians, not by industry,”
Leaders of the European auto industry are almost at one in carrying out politicians’ orders without question that a climate change emergency demands swift action to cut carbon dioxide using battery electric power; almost, but not quite all.
Carlos Tavares, CEO of Stellantis and its huge collection of automotive brands from the cheapest little Citroens to exotic Maseratis, has challenged the conventional wisdom, saying European regulations favoring battery electric vehicles (BEVs) in the drive to zero carbon dioxide (CO2) makes big assumptions about their capabilities, while internal combustion engines (ICE) are consigned to an early and wasteful grave. Tavares believes the rules neglect the big contribution that gasoline/electric hybrids can make at half the price of BEVs.
Tavares also says because electric cars are so much more expensive than ICE ones, effectively banning their sale means Europeans on average wages will be priced out of the private transportation market, running the risk of class resentment, amongst other negatives.
BEV sales appear to be well on the way to dominate the mass car market in Europe, but the forecasts up to 2030 are heroic to say the least. Fitch Solutions says BEV sales in Europe jumped about 72% in 2021, but growth will slow significantly in 2022 to 28.4% for an annual volume of just over 3 million. Schmidt Automotive says BEV sales will reach a market share of 60% in Western Europe by 2030, or 8.4 million vehicles. BEV sales more than doubled in 2020 to just under 750,000 and jumped again this year with sales of 1,143,000 or 10.3% of the market. Western Europe includes all the big markets like Germany, Britain, France, Spain and Italy.
The trouble is these forecasts assume a rosy view of BEV developments, which are supposed to be getting cheaper by the day until they are cheaper than ICE counterparts. In fact, battery prices seem to be moving in the opposite direction now as the price of crucial components respond to traditional supply and demand forces. There is also an assumption that new technology like solid state batteries will also make big strides, but the mass market introduction date has slipped well into the 2030s.
Then there is the crucial European charging network said to be expanding and improving daily while producing media stories about unreliability and a clunky lack of common payment systems.
Meanwhile the industry continues to unveil new BEVs with magnificent qualities, but which are too expensive for the average buyer, who may be priced out of the new personal transport market.
“I can’t imagine a democratic society where there is no freedom of mobility because it’s only for wealthy people and all the others will use public transport,” Tavares said in a speech last year.
Tavares complained that the regulations on CO2 emissions favoring BEVs were driven by politics and not designed by industry. He said gradually replacing ICE vehicles with electric ones, concentrating on gasoline/electric hybrids, would have been more effective and less wasteful.
EU CO2 rules insist cars and SUVs raise average fuel efficiency from the current equivalent of about 57 miles per U.S. gallon, up from 41.9 mpg in 2015, tightening again by 15% in 2025, and hitting 92 mpg by 2030. The rules from 2025 can probably be met by a combination of plug-in hybrids and electric cars but will require almost 100% battery-only by 2030. Britain has already decided that no new ICE cars will be sold from 2030. Other countries are pondering similar actions by 2035. The EU is expected to tighten the CO2 rules again after 2025.
Tavares doubled down on his position in an interview this month with European newspapers.
“What is clear is that electrification is a technology chosen by politicians, not by industry,” Tavares said in the interview.
Many politicians repeat the mantra that BEVs are zero CO2 rated. They clearly emit less CO2, but they are far from completely clean.
“Given the current European energy mix (much coal and natural gas), an electric car needs to drive 70,000 kilometres to compensate for the carbon footprint of manufacturing the battery and to start catching up with a light hybrid vehicle, which costs half as much as an EV,” Tavares said.
This is a contentious issue. The 70,000 km figure is high, while some green advocates leave the impression BEVs produce zero CO2. The true figure will vary with the way electricity is generated and the size of the battery. But even BEVs which are fuelled by electricity that is renewable, like wind or solar, will still have an important CO2 content because of the manufacturing process, exotic materials used in batteries, and power consumed in recycling.
“The brutality of this change (to battery only) creates social risk,” Tavares said without explanation, but this ties in with his earlier comments that the expense of electric cars might well close the new market to average wage earners and stir resentment as they are forced to use buses, trains and bikes.
Tavares’s remarks are astonishing given the silence of the rest of the industry up to this point. The European Auto Manufacturers Association, known by its French acronym ACEA, declined to comment.
“Carlos Tavares appears as a lone voice in challenging the EU policy towards vehicle electrification, whereas other CEOs are mute on the issue, other than to extol their own company’s efforts to deliver what the politicians are demanding,” said British automotive expert Dr Charles Tennant.
Tennant agrees light hybrid cars may offer a better solution than BEVs, not least because they are much cheaper.
“Currently battery electric cars are well out of the price range for most consumers, as manufacturers continue to offer only high-end premium halo electric vehicles. Business users and company car drivers may well be lapping these cars up with their taxation benefits and social acceptance, whereas everyone else is left waiting for lower cost electric cars,” Tennant said.
Dr. Kelly Senecal, co-author of the new book Racing Toward Zero: The Untold Story of Driving Green, also fears the push to all-electric has important shortcomings.
“Europe’s rapid push to an all-electric fleet is not only environmentally risky, but could also have negative social implications,” says Senecal.
“Partial electrification through a targeted combination of hybrid and battery electric vehicles is the more responsible route, guaranteeing rapid decarbonization while maintaining affordable options for consumers. Promoting advancements through fair regulation instead of technology-favoring legislation is the best approach to achieve a more sustainable future,” Senecal said.
Not surprisingly, environmentalist have other ideas.
“Tavares’ claims that hybrids offer a cheaper and faster climate solution are simply not grounded in reality,” said Julia Poliscanova, senior director for vehicles and e-mobility at Brussels based lobby group Transport and Environment.
“HEVs emit 20% less greenhouse gases, on average, than conventional cars while fully electric cars cut emissions by 65% and will only get better as the grid becomes cleaner. A number of carmakers, including some Stellantis brands and Toyota, were simply late investing in battery electric cars. Failing to back a zero emissions technology in a timely fashion should not give them the power to delay the transformation of the rest of the industry,” Poliscanova said.
Profit over environment
James Carter, consultant at Vision Mobility of Toronto, Canada, said Tavares statements show he is more concerned with profit than the environment, although he does concede the lack of low cost BEVs needs to be addressed. Carter also said in a LinkedIn posting Tavares’ comments might attract unfavorable reactions from investors who are increasingly concerned that what might be seen as a lack of enthusiasm for current social issues can undermine stock prices.
Auto expert Tennant points to evidence that government attempts to push their selected technology down the throats of an unwilling industry can have huge negatives.
“Let us not forget we have had political solutions that have gone wrong in the past too, where manufacturers and consumers were pushed to favour diesel cars over petrol (gasoline) in a bid to reduce CO2 emissions in the 1990s, even though it was known that they instead produced harmful particulates and nitrogen dioxide gases. Back then lean burn petrol engines would have been a better technology, but the political push for diesel was just too strong,” Tennant said.
“So while the Tavares led Stellantis group presses on with its own €30 billion ($34 billion) electrification plans, maybe the politicians and industry should pause if not to replicate mistakes of the past,” Tennant said.
Stellantis was formed by a merger of Groupe PSA and Fiat Chrysler Automobiles a year ago, and comprises brands including Peugeot, Citroen, Opel, Vauxhall, Fiat, Chrysler, Alfa Romeo and Maserati. Stellantis brands accounted for 21.4% of Western Europe’s sales in 2021, behind market leader Volkswagen’s 30.5%, according to ACEA.