In the most recent Capital Letter, I wrote about growing signs of the disaster that may be facing European carmakers as a result of the coerced transition to electric vehicles (EVs).
Italy’s government has been sounding the alarm for some time. The country’s industry minister, Adolfo Urso, has now returned to this theme, describing the EU’s ban on sales of new traditional cars after 2035 as posing a “grave crisis” for its auto sector. He wants the ban (and, it can be assumed, the forced ratcheting down of conventional sales that precedes it) to be reviewed and revised.
“The road map of the Green Deal, as it was designed, has already demonstrated its contradictions with the collapse of the European electric vehicle market and the grave crisis of European carmakers,” Urso said in an interview. “The data speaks for itself. It’s already clear the road map . . . is not sustainable.”…
The country’s biggest carmaker, Stellantis, has suspended car production at its historic Turin plant for a month, until mid-October, because of weak demand for the electric version of its Fiat 500, which is priced at €30,000, compared with €17,700 for the hybrid version. Volkswagen, Germany’s largest carmaker, recently warned workers it would no longer honour its decades-old job guarantee. An estimated 165,000 people work in Italy’s automotive industry, and about 780,000 in Germany.
Car production in Italy fell more than a third in the first seven months of the year, compared with the same period of 2023, according to Italy’s National Auto Industry Supply Chain Association. Hybrid vehicle sales were up 16 per cent in Italy in the January to August period, compared with last year’s equivalent period, while electric vehicle sales were down 12 per cent.
Hybrids doing well, EVs doing badly. That wasn’t meant to happen. Sales of new hybrids will be banned in the EU after 2035.
Urso rightly drew attention to the fact that the pace of this transition would leave no time for the EU’s manufacturers to create their own domestic supply chains, thus creating a dangerous dependency on China:
The risk is we pass from dependence on Russian fossil fuels to dependence on critical raw materials coming from, produced by, or processed in, China.
Urso is right. He might also have mentioned that the pace of the transition is as reckless as it is pointless: It will have next to no effect on the climate. But there are certain things that cannot be said aloud.
Urso also warned that sticking with the current timetable was going to stir up discontent:
“Everyone is aware that if we don’t move in a hurry, within a few months, that in Brussels, Strasbourg and other European capitals, we’ll find not only farmers with their tractors, but also workers,” Urso said. “We’re starting to feel this atmosphere across Europe.”
That’s right, too. There are signs that labor unions are beginning to wake up to the scale of the disaster that lies ahead.
As an alternative, Urso suggested that the EU could spend a lot of money to smooth the transition’s path. Where that money might come from remains a mystery.