Action, a "reality check", and mutually beneficial trade relations are needed to ensure the future of Europe's automobile industry, the President of the European Automobile Manufacturer's Association (ACEA), Ola Källenius, highlighted on Thursday at the Brussels Motor Show.
During a press conference, the recently elected ACEA president and Mercedes-Benz CEO discussed the priorities for his presidency, outlined in a letter to EU leaders on Thursday.
The call for action from European stakeholders comes in the wake of a year marked by stagnation in passenger vehicles' uptakes, migration of production out of the EU, mass layoffs and international competition.
Trade wars
"It is understandable that the EU must protect its domestic market and economy," stated Källenius. "But experience has also shown that potential trade wars have no winners. Protectionist measures are not necessarily the best solutions."
The President called for more constructive and mutually beneficial collaboration in the ongoing industry battles between Europe and China, namely the tariff wars concerning electric vehicles (EVs).
Logo BYD, known for their EVs, at the Brussels Motor Show 2025. Credit: Belga / Jonas Roosens
"The playing field should not be used to cut off markets and endanger supply," said Källenius. "Rather than raising walls, the European internal market should be strengthened and made more resilient."
Regarding trade relations with the US, Källenius stated that the ACEA "looks forward to working with the incoming administration," as he emphasised that the EU needs to seek a "grand bargain" with the US to avoid trade conflicts.
'Reality check'
While Källenius reiterated the industry's commitment to the EU's shift on zero-emission transport, he emphasised that the Green Deal needs "a reality check and realignment." He added that it needs to become "less rigid", "not penalty driven" and must be adapted to current geopolitical realities.
The President asked for clearer CO2 emission goals for vehicles, and to find solutions to the "disproportionate costs" of compliance for the 2025 targets. "The risk of paying heavy penalties for not meeting CO2 targets would severely hamper our competitiveness and would divert necessary funds from research and development," he added.
EV chargers at the Brussels Motor Show. Credit: The Brussels Times
While the industry has increased investment in EVs, infrastructure and market conditions need to change for "zero-emissions mobility to flourish," according to Källenius. Solutions range from "pushing for renewable energy" to increasing "charging infrastructure" and "fiscal and non-financial incentives" to purchase EVs.
Take action
"The report on European competitiveness by Mario Draghi [...] lays out a clear and comprehensive roadmap towards improving overall competitiveness," stated Källenius "Now, it is about ensuring the suggestions from this report are turned into decisions and reforms."
Among his priorities to drive competitiveness, Källenius highlighted the need to address high labour costs and "overregulation". Tackling these factors, according to the President, would "enhance the overall affordability and competitiveness of vehicle production in Europe."
The ACEA will also push to secure a competitive value chain, focusing on automotive components, battery development and manufacturing, software development and semiconductors.
However, the President clarified that none of the priorities can be achieved unless action is taken. "To quote Mr. Draghi, without action, we will either have to compromise our welfare, our environment, or our freedom."
