Interview: EU emissions goal lacks clear plan, warns Ineos Automotive CEOs
The European Union has a goal of reducing emissions, but it has no plan to achieve this goal. "And that is our biggest disappointment," says Lynn Calder, CEO of Ineos Automotive, a company that produces the off-road Grenadier. She believes that if Europe switches to all-electric cars, "we will fail."
Let's focus on Europe and the issue of regulations. The key phrase not only for the automotive industry today is "CO2 emissions."
Lynn Calder, CEO, Ineos Automotive: Yes, it is definitely a huge challenge for the entire industry. As a new brand, it is somewhat easier for us because we don't have the "baggage" of 100 years of history and entered the market when changes were already taking place. But even as a small manufacturer, you have to make decisions on how to balance regulations and what customers want to drive.
Introducing a new car to the market means an investment that must pay off. Meanwhile, there is still no clarity on where market development is heading. Governments in the United Kingdom and the European Union have a goal of reducing emissions, but no plan on how to achieve it. And that is the biggest challenge for us and the biggest disappointment.
Of course, I will do what is necessary to adapt the company to regulations and achieve net zero emissions. But I need a clearly defined plan on what is possible and what is not. Just because governments want us to be 100% electric by 2035 does not mean it will happen. Especially when we see that many drivers simply do not want electric cars.
2035 is the year when the so-called ban on the sale of combustion engine cars is supposed to come into effect. Some brands have announced that they will be 100% electric much earlier, by 2030. And now some of them are slightly "softening" their rhetoric, even taking a step back. From your words, I understand that Ineos does not intend to be at the forefront in the race to zero emissions.
No, we do not intend to. And we never said we would. We entered the market with gasoline and diesel cars. In our opinion, there will always be a market for the Grenadier with a combustion engine. Maybe there will be a ban in the European Union, but we will be in at least 50 countries around the world. And in each, there are different ideas.
Not all drivers want to drive electric cars. They are more expensive because they do not hold residual value, but primarily because there is no developed charging infrastructure, and consumers are still afraid of range issues. Of course, there is a part of the market that is already buying electric cars today and is satisfied with them. But there is also a part that does not buy because they don't want to—what will we offer them?
Indeed, we see that some brands are retreating from their original declarations. The EU announced regulations; manufacturers worked hard to be ready for them. Both sides forgot about drivers and what they need daily. People need to be given a choice. That’s why we announced our next model as electric but with a so-called range extender, a small engine that will recharge the batteries, eliminating range anxiety. Such a car drives like one with a conventional engine with drastically lower emissions.
And if governments ban even such solutions, I don't know what we will do. I believe politicians should allow for transitional technologies. And it will be better for the environment than trying to switch to 100% electric and failing. Because I believe we will fail.
What do you think is the solution for 2035 in the European Union?
A mix of drive systems. We need to leverage the potential of hybrids, plug-in hybrids, and range extenders to reduce CO2 emissions in different ways. I am convinced it is a more reasonable solution than striving solely for electric cars because it will undoubtedly fail. Consumers can be encouraged to buy "electric" cars, but without investments in infrastructure, people simply won't buy them. They will keep conventional vehicles longer and buy much older used ones, resulting in a step backward.
If Ursula von der Leyen were talking to you instead of me, what would you tell her?
Please clearly define what the plan is and do not ban transitional technologies. Also, develop infrastructure.
There are voices that various incentives and subsidies are not enough to get drivers to switch to electric cars. Do you think it's time for the stick instead of the carrot?
I don't believe in the effectiveness of incentives, but I understand them. The government expects a consumer to stop driving a combustion car and switch to an electric one—more expensive to buy, which, depending on where and what kind of electric energy it is charged with, can be more expensive to operate. In such a situation, the government has to give something in return. It cannot simply introduce regulation and expect consumers and manufacturers to just comply.
On the other hand, if we see that something is economically viable only when there are short-term incentives, it won't work. Within the European Union alone, there are different ideas and views on the same issue. Look at the tax on owning a combustion engine car. I can imagine that if it works, discouraging its ownership, then when all drivers are driving only electric cars, governments will tax them too to avoid losing a large part of their revenue.
Ineos produces off-road vehicles at a time when SUVs are under scrutiny. Like in France, where a referendum supported higher parking fees for large cars. Will Europe turn away from SUVs?
We already see some signs, indeed. However, currently, most cars are getting bigger in both size and weight. Due to batteries or shared platforms used by auto companies. Even "small cars" today are big.
France is a special case because it also involves significant taxes on SUVs with combustion engines. This market is trying to be limited, but as I said—the world is huge, and there are many other countries where this type of car will be needed for many decades to come.
