Electric mobility and European competitiveness: innovation is a relay race
Under the latest proposals put forward by Brussels, starting in 2035 carmakers will be required to meet a target of reducing tailpipe emissions by 90%, effectively introducing a 10% margin of flexibility compared with the previous rules, contingent on the use of low-greenhouse-gas steel produced in Europe and on the inclusion of emissions linked to synthetic fuels and biofuels. Manufacturers will be able to continue selling vehicles with internal combustion engines beyond 2035, because the penalties per gram of CO₂ that would have made such vehicles economically unsustainable will be eliminated.
Though they may appear to be grounded in common sense, these measures are in fact even more harmful, because they are driven by anxiety over international trade policies and by the realignment of different European governments’ levels of commitment to sustainability, yet lack any coherent strategy. They are fragmented, reactive interventions that are incapable of achieving the goal of safeguarding the long-term competitiveness of Europe’s mobility industry, or of enabling greater energy independence for our continent.
This is not the time for Europe to loosen emissions rules, nor to resort to defensive industrial reflexes. This is also because the first effects of the proposed “flexibility” translate into the need to revise past estimates and record divestments and strategic shifts on the balance sheet that, in Stellantis’s recent case, resulted in losses and write-downs amounting to more than 20 billion euros. Ultimately, flexibility produces disorientation and confusion.
In a recent public debate, the CEO of Stellantis and his counterpart at Volkswagen argued for the need for a Made in EU policy that would focus, on the one hand, on investments aimed at strengthening a European industrial ecosystem for electric mobility and, on the other, on a form of protectionism involving incentives for consumers who buy vehicles produced in Europe. These proposals are not conclusive, however, because it is highly doubtful that an industry can be sustainably defended through autarkic and protectionist measures. Moreover, closing Europe’s competitiveness gap in the electric vehicle sector is not compatible with the time required to develop a vertically integrated industry at the continental level.
At present, leadership in large-scale battery manufacturing clearly lies in certain eastern regions. Acknowledging this reality is not a concession of weakness, but rather the starting point for intelligent planning. Europe’s challenge is not to “win back” the current generation of battery technology, but to position itself for the next technological generation. Rather than focusing on controlling the entire supply chain within European borders, the debate should shift toward defining a strategy for technological partnerships. The issue is not the cost of today’s technologies, but how European research and industrial players can collaborate with technology leaders to exert pressure on future costs and drive the next leap in performance.
Because Europe entered this competition late, compared with the American first mover and eastern competitors, the necessary reflection is this: which path, which technological roadmap, can quickly make it possible to close the gap and win. Yet if one understands that the cycles of technological transitions historically resemble relay races more than individual runs, then one understands that competitive advantage comes from the synchronized handoff of the baton, not from isolated acceleration. This requires roadmaps based on identifying one’s own strengths and, then, on partnerships, knowledge exchange, and co-development.
If Europe treats electric vehicles as a matter of sovereignty, it risks slowing its own transition. If, instead, it treats them as a platform for coordinated technological advancement, it will be able to shape the next technological frontier.
Originally published in Fortune Italia
