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Will drivers get burned by EU ban on ICE cars?

·4-min read

The European Commission unveiled Wednesday plans to accelerate its bid to reach carbon neutrality that effectively bans the sale of new cars with internal combustion engines from 2035. What will this mean for drivers?

- Can one still drive a petrol or diesel car?-

Yes. Automakers are expected to sell millions of petrol- and diesel-engine cars in Europe between now and 2035 and these vehicles will still be able to circulate after the new rules go into force.

The date was chosen because the commission wants the block to reach carbon neutrality in 2050 and data show that an average car lasts 15 years.

Julia Poliscanova, who directs work on vehicles and electrification at European pressure group Transport and Environment, said the EU measure doesn't block petrol and diesel vehicles themselves from the roads.

"It’s not a ban, it’s a requirement for new sales," she said, and only electric cars will meet those requirements.

However, petrol and diesel vehicles might still face local restrictions and low emissions zones already in place in numerous European cities and which will get more restrictive.

The measure also doesn't apply to the used-car market, but the value of vehicles with internal combustion engines is likely to depend on local restrictions on where they may drive.

"A good number of vehicles will become obsolete and probably won't have the right to drive in certain urban zones," said Thomas Morel at consulting firm McKinsey.

"Their residual value could drop drastically."

- Will cars become a luxury product ? -

Given that the price of electric vehicles are currently considerably higher than for petrol and diesel cars, the question is valid.

That is largely due to the cost of batteries, but automakers say their cost will fall as production volumes increase, as they do for most other products.

The Stellantis group, which owns the Fiat, Jeep and Peugeot brands amongst others, believes the average cost of electric vehicles will fall to those of petrol and diesel cars between 2025 and 2030.

Thomas Morel at consulting firm McKinsey said the industry is likely to see a shift towards leasing, which can reduce up-front costs to consumers.

He added that "one can imagine their will be incentives to change vehicles like the cash-for-clunkers offers" to help the less well-heeled afford a new electric vehicle.

Meanwhile, the cost of new petrol and diesel vehicles is likely to rise as governments increase fees meant to discourage customers from buying them.

- What happens to old cars?

Most should be recycled as the EU framework foresees over 90 percent of parts being recovered.

"Retrofit is growing in some countries," Poliscanova said.

It is still mainly a cottage industry, but kits are available to swap an internal combustion engine and fuel tank for an electric motor and battery packs.

- Are automakers ready? -

Last year marked an acceleration in the transition towards electric vehicles,thanks to authorities raising the regulatory stick while offering carrots of public funds to support investment and research.

Consumers responded, with the sale of hybrid and electric vehicles booming in Germany, France and Italy.

"Each automaker has taken measure of the changes underway," said Morel.

"However, the levels of investment in electrification remain very different from one automaker to another," he added.

Volvo has set the most ambitious goal of selling 100 percent vehicles by 2030. Volkswagen aims for 60 percent of its European sales to be electric by that date.

- Do hybrids have a future? -

Plug-in hybrids have both an electric and internal combustion engine, which kicks in if the battery runs out.

But these vehicles are heavier, and can emit considerable pollution when not running on electricity.

While they could fall foul of the 2035 deadline, France and Germany support them as a "transition" technology and their fate remains in play.

- Does Europe have enough charging stations? -

No. In September, the EU had 250,000 public charging stations according to the European Court of Auditors. But these were mostly slow chargers, were complicated to use and concentrated in certain countries.

Automakers are worried and want EU funds to expand the number of public charging points and help buyers install fast chargers at home.

Poliscanova believes the Commission must set standards for charging points to reassure drivers they will be able to recharge on long trips.

Expected gains in range of battery electric vehicles should reduce such concerns as well.

tsz/rl/wai

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