In the end he couldn't take it anymore. You took pen to paper and wrote to key decision makers and stakeholders across Europe. So Luca de Meo, CEO of Renault Group, decided to “make my voice heard – as he explained – not to engage in politics, but to make a contribution to choices on the right policy”.
A strong, important document, which arrives a few weeks before the European elections and is – in fact – an appeal for Europe to mobilize to successfully and synergistically achieve the energy transition of the automotive industry. But not only that: De Meo also aims to ensure that this period of unprecedented transformation is a springboard for the industrial renewal of Europe, developing cross-sector collaborations and carrying out large-scale projects between public and private sectors. “We have already seen with Airbus – he explains – what Europe is capable of doing. By intensifying cooperation initiatives, we will put our industry on the path to renewal.”
READ THE FULL 19 PAGE DOCUMENT
But let's get to the heart of this stance: “The United States incentivizes, the Chinese plan, the Europeans regulate”, says De Meo who then formulates seven recommendations and eight measures to develop a truly competitive and decarbonised European industrial policy: “Europe – he admits – must invent a hybrid model, for example by involving “the 200 largest European cities in the development of the decarbonisation strategy”, establishing an “industrial Champions League” to reward the actors involved in the transition, creating “economic areas green” in which investments and incentives for the energy transition can be concentrated.
On the electric front, it proposes ten major European projects in strategic areas, which go well beyond the automotive industry: promoting small European cars, of course, but also revolutionizing last mile deliveries, developing charging infrastructure and technology V2G, increasing Europe's competitiveness in the semiconductor sector.
In summary, Luca de Meo's Letter offers four major chapters. Here they are in detail
1 – The current European automotive industry – Social and economic contribution
13 million people employed in the sector in Europe
7% of the total workforce in Europe
102 million euros of positive trade balance between Europe and the rest of the world (equal to the French trade deficit)
17% of Europe's total R&D spending (including public sector)
2 – Challenges to the leadership of the European automotive industry – Shift towards Asia
Around 4% of electric vehicle sales in Europe are made by Chinese brands
In 2023, 35% of electric vehicles exported worldwide were from China
Cost advantage of 6-7,000 euros for the Chinese in C-segment cars (25% of the total price)
Development cycle of 1.5 – 2 years in China compared to 3 – 5 years in Europe.
3 – Electrification challenge – Doubled business potential with electric vehicles: a €200 billion opportunity in Renault's geographical perimeter
55% of sales will be electric vehicles by 2030 (vs. 8% today)
252 billion euros invested by European manufacturers between 2022 and 2024 to achieve the “net zero emissions” objective in Europe by 2035
25 million jobs affected by the digital and environmental transitions, impacting 500,000 jobs in the internal combustion vehicle sector and creating 120,000 new jobs.
4 – The regulatory paradox in Europe
8-10 new regulations are introduced in Europe every year
Cars today are on average 60% heavier than they were 20 years ago
Increase in car prices by 50% compared to 20 years ago
Loss of 40% of jobs in the production sector in France due to delocalisation (labor costs 40% higher in Europe than in China)
Double aging of the average car fleet (12 years today compared to 7 years in the past)
Up to 25% of R&D resources mobilized to study the application of regulations
Different regulatory models
110-160 billion euros in production incentives in China, for the period up to 2022
$40 billion in tax credits for green manufacturing in the United States under the Inflation Reduction Act
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