Is the goal of going 100% electrified by 2035 realistic?
yes. The transition to an all-electric system will be forced, but it will happen. Although Wednesday’s vote was a major step in the European legislative process, it was no surprise. The commission proposed an end to combustion engines as part of a “green package” last July, and the 2035 deadline has been on everyone’s minds ever since. It’s not really thunderclap.
The builders will be ready. Since last summer, major groups such as Renault and Stellantis have raised their targets for electric cars by 2030 several times, and have already launched a massive electrification of their production. From this point of view, Wednesday’s vote doesn’t change much for them.
The situation is different for equipment manufacturers, since part of their sales depend on heat engines. All this activity will not disappear: the thermal market will remain outside Europe, and we will continue to manufacture combustion engines. But manufacturers will have to diversify their portfolio of activities. They’ve already started, they’ll have to hurry up.
With what consequences?
Major equipment manufacturers may have to approach centers of thermal expertise, which will shift to the United States, Asia, Latin America, India or China, where these engines will not be banned. The most exposed and exposed subcontractors who rely solely on the combustion engine (foundries for example) will have to either convert or close their sites, with an impact on employment.
Will manufacturers be able to produce enough batteries?
The need for raw materials will increase, especially for lithium, cobalt or nickel. By 2025, we estimate that the extraction capacities are relatively high and will be sufficient. On the other hand, refining capabilities are located almost exclusively in China, which poses a geopolitical risk. Therefore, there is a need to invest in the entire ecosystem, but it is not too late.
Another drawback that was mentioned is the lack of charging stations…
This is actually a major topic that falls more within the purview of states or energy companies than builders. It will be necessary to significantly increase the number of stations, but also to simplify and standardize the supply, while today the market is very fragmented. The regulatory framework will also have to be modified to facilitate the installation of stations outside the home. I think countries will adapt: under the “Fit for 55” (the EU’s “climate package”, editor’s note), they will be asked to make binding commitments in this area. There was real awareness.
Will drivers really follow?
Mindsets can change very quickly when adopting a new technology. The main current and future obstacle is price. This is still much higher for an electric vehicle than for a thermal vehicle, due to the cost of the battery. But within a year, expectations had changed. With the increase in commodity prices, the goal of seeing that cost fall below the $100/kWh barrier is moving away. Most forecasts estimated it would be around 2024, but today it appears to be somewhat vulnerable. Suddenly, if a shift towards 100% electrification is likely to occur, it will also jeopardize access to mobility in the broad sense.