Say it ain’t so: BMW, Volkswagen, and Renault take aim at Europe’s ICE ban phase-out
The heads of BMW, Volkswagen, and Renault have spoken out against European Union’s emission targets in recent days, arguing that the phase-out rules put too much pressure on the industry and that consumers aren’t buying EVs fast enough. Next year, the policy will tighten ahead of the full ban of gas and diesel cars in 2035, leaving automakers to pay steep fines if they fall short.
In 2025, the EU will require a 25% reduction of fleet emissions from new passenger cars sold in Europe, compared to 2021 figures – and legacy automakers are not happy about that, arguing that basing their entire industry on the whims of consumers’ desire (or not) to buy EVs isn’t fair.
Failure to comply with the new rules will come at a cost, a €95 ($102) fine for every vehicle registered in the EU, multiplied annually by each CO2 g/km above the target.
“We believe a comprehensive review of CO2 fleet legislation in the EU is essential,” BMW CEO Oliver Zipse said yesterday, as reported in Automotive News Europe.
Interestingly, BMW has already said it has reduced its own CO2 emissions fleet to an average 20% below the European target for 2023. Zipse also said the company was on track to hit 2025 targets as well – last year, 15% of BMW’s sales were BEVs, with a target for 20% in 2025. The company estimated 50% BEV sales by 2030 worldwide, and possibly higher in Europe, he said.
Still, Zipse is urging the EU to turn down the pressure. “By the end of 2025 the world will note that it’s not that easy,” he added, speaking at the automaker’s annual results conference. “By then the pressure then will be significant for the European automotive industry.”
“Something that’s not taken into account that it’s the free decision of millions of customers,” Zipse said. “It’s not just like the energy infrastructure where you can switch something off and then something else happens automatically.”
Last week, Volkswagen Group CEO Oliver Blume said: “It does not make sense that the industry has to pay penalties when the framework conditions for the EV ramp up are not in place.” Renault CEO Luca de Meo chimed in too this week, asking for a call for review in an open letter to EU legislators published this week.
Electrek’s Take
Automakers are, to no surprise, talking out of both sides of their mouths here. And the 2035 ICE car ban is facing some serious heat ahead of June’s European election, as momentum for reversing the ban is growing, and lawmakers who take office after the election could easily water down the policy.
As for the automakers, just last month, ACEA, Europe’s automakers association, headed by de Meo, said that it is not pushing back and is all in with the EV future, with de Meo adding that the auto industry wants no part in arguing “against the regulation.” “We are not contesting 2035,” said de Meo. “Now we must get down to it.” He added that the upcoming ban target of 2035 “is potentially feasible, but the right conditions must be put in place.”
Those conditions usually mean consumers opting for European cars over Chinese ones, as European automakers face immense pressure from cheaper, high-quality Chinese brands arriving by the shipload. Automakers have been urging for more government incentives and investment in charging infrastructure to help nudge higher EV adoption rates. 2024 brought an end, or a radical reduction, in many EU incentive programs. Creative solutions are certainly on the table: Volkswagen and Renault are negotiating jointly making a sub-€20,000 ($21,600) EV.
De Meo also argued that European automakers are under pressure from all sides, with the need to invest in new technologies and retrain the workforce to avoid mass layoffs, to managing the price of raw materials such as lithium. “China rules, the U.S. stimulates and Europe regulates,” he wrote in the public letter, which also called for a 10-year “Marshall Plan” fund that could replace older cars with newer, cleaner ones while redistributing funds across Europe based on each country’s capacity. He said this plan could save 1 million tons of CO2 by the end of the decade, according to Automotive News Europe.
Last year, the EU agreed to watering down a European Commission ruling on Euro 7 vehicle emissions after major pushback from automakers and eight countries, including France, that made the argument that the changes could divert investments from EVs.
As in the US, the European Union faces a volatile election year. In any case, EU has said that it will review the CO2 policy again in 2026 to see how things are going. If the policy does weather the storm this year, European automakers can still produce internal combustion engines even after 2035, as long as they are exported and sold outside of the EU.
Photo: BMW
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EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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