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European carmakers urge EU for help as EV sales, emissions targets tighten

The European auto industry is facing challenges including a shrinking market, lack of charging infrastructure and a competitive manufacturing environment.

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Car bodies are lifted at “Factory 56”, one of the world’s most modern electric and conventional car assembly halls of German carmaker Mercedes-Benz, in Sindelfingen near Stuttgart, Germany, March 4, 2024.

European carmakers on Thursday asked the EU for "urgent" assistance as they contend with slumping electric vehicle sales and stricter emissions regulations due next year.

The European Automobile Manufacturers' Association (ACEA) said the industry was trying its best to comply with decarbonisation targets, but was hamstrung by problems including a shrinking electric car market, lack of charging infrastructure and the erosion of EU manufacturing competitiveness.

In a formal request to Brussels, the industry lobby group asked "EU institutions to come forward with urgent relief measures before new CO2 targets for cars and vans come into effect in 2025".

Europe has been racing to produce more EVs as part of its green transition, with the clock ticking on an EU deadline to phase out the sale of fossil fuel-burning cars by 2035.

But after years of growth, electric car sales began falling at the end of 2023, and now account for just 12.5 percent of new cars sold on the continent.

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Reviewing emission regulations

According to the ACEA, car sales overall have also stagnated, and remain around 18 percent lower than pre-pandemic levels.

"We're playing our part in this transition," the ACEA's appeal said, pointing to manufacturers' adoption of EV technology.

"We are missing crucial conditions to reach the necessary boost in production and adoption of zero-emission vehicles: charging and hydrogen refilling infrastructure, as well as a competitive manufacturing environment, affordable green energy, purchase and tax incentives, and a secure supply of raw materials, hydrogen and batteries," it added.

"This raises the daunting prospect of either multi-billion-euro fines, which could otherwise be invested in the zero-emission transition, or unnecessary production cuts, job losses, and a weakened European supply and value chain."

The lobby group asked the commission to bring forward a planned review of the CO2 regulations, which is currently slated for 2026 and 2027.

EV sales, however, are forecast to rebound next year to as much as 24 percent of new cars sold in Europe, according to a report by think tank Transport & Environment (T&E).