Lawmakers for the European Union put an expiration date on the sale of new cars with combustion engines, approving legislation on Tuesday that in effect bans vehicles powered with diesel or gasoline from automobile showrooms beginning in 2035.
The law, part of the E.U.’s ambitious plans to make the 27-member bloc carbon neutral by 2050, is aimed at encouraging automobile manufacturers to double down on the production of electric vehicles. Many automakers have already been revamping their lineups to include more battery-powered vehicles.
With the passage of the law, Europe becomes one of the largest automobile markets to mandate a focus on battery-powered engines for cars, but not the only one. Last year, California passed similar legislation, banning the sale of gasoline-powered cars by 2035, and it was swiftly followed by New York.
Proponents say the legislation will create certainty for the auto industry by encouraging governments to invest funds needed to develop infrastructure for battery powered vehicles, including expanding the charging network.
But critics charge that enacting a ban is counterproductive and threatens tens of thousands of the 13 million jobs in the E.U. that are linked to the automotive sector.
Europe’s Shift Away From Fossil Fuels
The European Union has begun a transition to greener forms of energy. But financial and geopolitical considerations could complicate the efforts.
- In Portugal: A hydroelectric project that is reshaping a river valley about 65 miles east of Porto could provide an answer to one of the most vexing questions facing renewable energy.
- Wind Troubles: Europe’s wind turbine makers, the crown jewels of the region’s green energy industry, are reporting losses and laying off workers.
- Wood Energy: European lawmakers voted to phase out some wood-energy subsidies, a recognition that the incentives have contributed to deforestation without curbing greenhouse gas emissions.
- Turning to Africa: As European leaders face a gas crisis brought on by the war in Ukraine, they have been converging on Africa’s capital cities, eager to find alternatives.
As if to make the point, Ford Motor announced on Tuesday that it was cutting about 11 percent of its work force in Europe over next three years, as part of its pivot to electric-vehicle production.
European leaders advocating action on climate change have pushed back on that argument, insisting that if the bloc is to remain competitive in an industry that is increasingly dominated by China, it has to pivot more quickly, and the legislation can help make that happen.
“The industrial revolution is happening whether we like it or not,” Frans Timmermans, the European Union’s top climate official, told lawmakers on Tuesday. “We can choose to lead it. Or we can leave it to other parts of the world to lead it, and then all we can do is follow.”
The law includes limits on carbon emissions for new cars beginning in 2030, seeking cuts based on 2021 levels, and includes exceptions for companies that produce fewer than 1,000 vehicles. Lawmakers stressed that the law applied only to newly produced vehicles, not to fossil-fuel-burning cars and vans that are already on the road.
Heavy trucks and buses are also not included in the legislation. They will, however, be subject to a different set of rules that will scale the reduction of carbon emissions over time, but without any outright bans on fossil fuels.
A majority of the job cuts announced by Ford on Tuesday, 2,300 positions, will be at the company’s plants in the western German cities of Aachen and Cologne, the company said, with another 1,300 in Britain. Hardest hit will be workers in product development, as the company is driven by the shift to “all-electric powertrains and reduced vehicle complexity,” it said.
Other cuts will be in its administration, marketing and sales divisions in Europe, it said. Ford employs some 34,000 people across Europe.
More than half of Ford’s employees in Europe are in Germany. Although following the layoffs, that number is expected to shrink by nearly a third over the coming years, as the company reorganizes its production to focus on electric vehicles, many of which will be manufactured in Spain.
“The path to a sustainable profitable future for Ford in Europe requires broad-based actions and changes in the way we design, build and sell Ford vehicles,” said Martin Sander, the manager of Ford’s electric-car division in Europe. “This has implications for the capabilities and organizational structure we will need in the future.”
Last year, Ford decided to end production of its Fiesta model by 2025 at its plant in the southwestern German city of Saarlouis, where some 4,600 people are employed. The company chose its factory in Valencia, Spain, over the German plant to produce two electric models that it will sell in Europe. It is working with employee representatives and local politicians to find a buyer for the plant and has held talks with other automakers and energy companies in an effort to retain some of the jobs in the region.
Ford is a relatively minor player in Europe’s passenger car market, accounting for just 4 percent of new registrations in 2021. It is the leading producer of commercial vehicles, especially its popular vans.
In addition to building a factory in Valencia, Ford plans to invest $2 billion in revamping its plant in Cologne, where the first all-electric model — a five-seat, midsize crossover S.U.V., that has so far only been teased — will roll off the line later this year. The company said on Tuesday that it wanted to offer an all-electric lineup in Europe by 2035.
Ford has been losing money as it struggles to transform its operations to meet the growing demand for battery-powered vehicles. On Monday the automaker announced plans to build a $3.5 billion electric-vehicle battery factory in Michigan using technology and services from Contemporary Amperex Technology Limited, a Chinese company known as CATL that is the world’s largest producer of batteries for electric vehicles.
Earlier this month, Ford posted a $2.2 billion loss in 2022 and predicted a difficult year ahead, amid chip shortages and other supply chain issues. In Germany, the company said, its competitiveness has been hurt by “economic and geopolitical headwinds.” Germany has struggled with increases in the price of energy and raw materials, driven up by Russia’s war in Ukraine.