Car manufacturers close, move or sell combustion engine factories – a race starts


As regulators set a course for a decade of electrification to minimize carbon emissions, automakers will increasingly find themselves in a race to close, convert or sell factories that manufacture internal combustion engine vehicles to avoid being left with “stranded assets” A leading analyst cautioned that conventional manufacturers are currently playing a “zero-sum game” as growth in electric car sales eats into the value of internal combustion engine factories, which are essentially “stranded assets,” Philippe Houchois, an analyst at investment bank Jefferies, said that the stock prices of automakers will rely largely on their ability to prevent losses on fossil fuel assets. “If you want to be a better valued automaker, you have to find a way to shrink your assets faster than a gradual transition to electric vehicles would suggest,” he said. The industry has already taken major steps away from fossil fuels. With new EU rules mandating an average carbon dioxide emission limit of 95g/km for all cars sold, 2020 is seen as a crucial year for electric cars. In the U.K. After the completion of the Brexit transition phase on Jan. 1, 2021, it has committed itself to maintaining its emissions policy at the same or higher level. As automakers scrambled to escape fines of hundreds of millions of euros, the regulations led to a dramatic increase in electric car sales – while Volkswagen has already admitted that it would meet its 2020 target, resulting in a fine estimated at 270 million euros (248 million pounds). BMW announced on Sunday that it would build 250,000 more electric cars by 2023 than previously expected. The company’s chief executive, Oliver Zipse, said he wanted about 20 percent of the cars sold to be electric by 2023, up from 8 percent this year. According to estimates from Matthias Schmidt, a Berlin-based automotive analyst, more than 560,000 battery-powered electric cars were sold in Western Europe in the year to November.

In November, battery-electric cars accounted for 8.7 percent of overall car sales, up from just 2.7 percent a year earlier.

Although Volkswagen’s ID.3 missed its emissions target, with 10,500 sold in October, it became the most successful BEV in Europe – although that was still around a third of the best-selling internal combustion engine car sales, the Volkswagen Golf.EU regulations would become somewhat tougher in 2021, but in the next decade, automakers are already seeing two important milestones.

Car producers must cut emissions of carbon dioxide by 15 percent between 2021 and 2025, and by 37.5 percent from 2030 – a demand that will lead to a gradual decrease in internal combustion engines in the mass market. Stricter regulations are required, however, as the EU aims to achieve net-zero emissions of carbon dioxide by 2050.

In the fall, the concept of halving car emissions within a decade was floated by EU officials. A Brussels-based advocacy group, Transport & Climate, has called for an end date of 2035 for the selling of all fossil-fuel cars in the EU, a move that would match the UK ban. T&E’s forecasts suggest that current targets would cause car manufacturers to slow down the adoption of electric cars, which the group says will be a lost opportunity for Europe to retain its lead over competitors such as China. Julia Poliscanova, T&E’s senior vehicle manager, said: “The current electric momentum is at risk of fizzling out as early as 2022 unless stricter CO2 rules are introduced.” Expensive pollution cheating scandals then shook the diesel industry, but they had more to do with toxic nitrogen oxides than carbon dioxide. You will see the large investment in electric cars by German producers, but they have a huge sunk asset in diesel engines,” he said. “Bailey added that the “big problem” will be in the supply chain for the automotive industry and workers, with businesses that do not have the ability to literally switch away from manufacturing parts for internal combustion engines v


Leave A Reply