European policymakers say they want a sustainable automotive industry, but they are setting unrealistic regulations only to adjust them at the end of each year, says Ford chief executive Jim Farley.
“However, when consumers do not show up, this is a recipe for turmoil,” he writes in the Financial Times. “This approach disrupts a complex cycle of product design, engineering and supply chains that require long lead times and billions in investment. We urgently need a regulatory framework for Europe that provides a realistic and reliable ten-year planning horizon.”
According to Farley, on one side, the industry faces the world’s most aggressive carbon mandates, regulations that demand a pace of electrification that is decoupled from the reality of consumer demand. “On the other, we face a flood of state-subsidised electric vehicles [EVs] imports from China, structurally designed to undercut European labour and manufacturing,” he adds.
China has more than enough manufacturing overcapacity to sell to every new vehicle customer in Europe. Chinese brands have doubled their market share in the region in just 12 months, reaching a record 5.5% in August. Meanwhile, the market share of EVs in the EU has stagnated at about 16% – well behind the 25% required to meet Brussels’ 2025 targets.
EU vehicle production is now 3 million units below pre-Covid levels, Kallanish notes.
“This is not a transition, but it’s more like a wind-down of Europe’s automotive industry,” Ford’s ceo warns. “To be clear, the industry is not asking for a bailout. We are not asking for protectionism to shield inefficiency. The approach to regulation – mandate it and they will buy it – has failed. We must align carbon targets with actual market adoption and provide automakers with a realistic and reliable horizon. This includes giving consumers the option to drive hybrid vehicles for longer, bridging the gap rather than forcing a leap to EVs they aren’t ready to take.”
European car manufacturers have invested hundreds of billions in EVs. Governments should match that commitment with consistent incentives to buy these vehicles and a charging infrastructure that extends into rural areas, he adds.
According to Farley, aggressive carbon targets on commercial vehicles unfairly penalise the small and medium-sized businesses that generate more than 50% of Europe’s GDP. “But Europe faces a binary choice. It can foster a thriving, competitive auto industry that leads the world in green technology. Or it can cling to unachievable targets and watch as its market is dominated by imports while its own factories rust,” he concludes.
