With Euro 7 measures expected to be introduced within the next few years, car manufacturers are shifting to electric vehicles (EVs), as internal combustion engine (ICE) vehicles are becoming less viable for the future European auto market. Several European automakers have already introduced a range of EV models, aiming for EVs to make up a high proportion of their sales by 2030. Now Asian companies are eying the European market for EV sales as new regulations are expected to dramatically restrict the sale of traditionally fuelled vehicles.
Throughout 2021 and 2022 the EU is addressing the pollution caused by vehicles on Europe’s roads to introduce a new emission standard called Euro 7 in 2025. Air pollution has been blamed for hundreds of thousands of premature deaths annually, as well as being linked to several diseases. However, the shift comes largely in response to the COP26 climate conference held last November in which several European countries made net-zero carbon emissions pledges.
Greenhouse gas emissions from road transport in Europe were thought to amount to over 600 million tonnes of CO2 in 2020. The establishment of new Euro 7 legislation is expected to help the EU achieve its Green Deal environmental goals. Euro 7 is likely to impose stricter testing and measurement conditions for vehicles as well as toughening particle filter standards.
Panagiota Dilara, EU Commission team leader for the law, stated “We need to make sure that the legislation that we are putting together safeguards clean air and the health of the citizens while, on the other hand, providing a stable and clear regulatory framework for the industry, combined with a good compliance mechanism.”
The EU is already planning to phase out all fossil-fuelled vehicles starting in 2035. And some countries are bringing in restrictions even earlier, as the U.K. is planning to ban the sale of ICE vehicles in 2030 and stop all exhaust emissions by 2035. While many countries are introducing a ban on the sale of ICE vehicles, many will remain on the roads for several years following. But automakers in Europe have taken the hint and are hitting the ground running in their EV production.
Nissan stated this month that it intends to stop ICE vehicles in the European market once the Euro 7 law comes into effect. New regulations could mean that automakers need to invest heavily in integrating new technologies into traditional vehicles, therefore making the price less competitive against EVs.
Nissan’s CEO, Ashwani Gupta, explains “If the total cost of ownership of battery-electric cars at Euro 7 is less than the total cost of ownership for the ICE cars… [then] definitely, customers will go for battery cars. So that’s why we’ve decided not to develop ICE engines, starting [from] Euro 7, for Europe.”
The Japanese car company announced last year that it plans to invest $17.3 billion over the next half a decade to hasten the electrification of its vehicles, with 23 new electrified models expected by 2030. However, Nissan will continue to sell ICE vehicles in other markets while they can remain competitive.
As well as Nissan, several other automakers have outlined plans for a shift away from ICE vehicles to EVs. Audi, for example, hopes to launch only fully electric vehicles from 2026, stopping all ICE vehicle manufacturing in 2033. Similarly, BMW is aiming for sales of 10 million electric cars this decade, expecting EVs to make up around half of its sales by 2030. Meanwhile, Volkswagen hopes EVs will make up 60 percent of its European sales by 2030.
Some manufacturers are taking a similar approach to Nissan by appealing to the demand of various world markets differently. Ford, for example, will continue the sale of its ICE vehicles in the U.S. while transitioning to EVs in Europe by 2026.
Korean brands Hyundai and Kia have also enjoyed recent success in Europe thanks to their new EV models. European automakers were the most competitive when it came to ICE models, however Korean manufacturers have proven their worth when it comes to EV competition. So far this year, Kia has been the biggest selling car brand in the U.K.
Both Hyundai and Kia offer competitive price points, and the conversion of classic petrol models to electric has been particularly appealing to the European market. The introduction of new innovative models this year is expected to propel the two companies to the top of the market. Hyundai’s Ioniq 5 will offer more room, greater range, and faster acceleration, while Kia’s EV6 will have a 300-mile range and can go from 0-60 in 4.6 seconds.
While Euro 7 may put fear into some automakers, as they race to develop their EV operations, others are embracing the change. Several European, American, and Asian car manufacturers have risen to the challenge and are expected to develop several highly competitive EV models by 2030.
By Felicity Bradstock for Oilprice.com
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