VDA President Hildegard Müller on the Franco-German Declaration regarding the Future of the European Automotive Industry

VDA President Hildegard Müller: 

„The agreement between Germany and France on the European Commission's proposals for the Industrial Accelerator Act (IAA) and the Automotive Package is an important step, but falls short of the necessary adjustments in key areas. Further discussions and adjustments are therefore needed in the negotiations within the Council and Parliament.

At the same time, today's compromise between Germany and France can send an important signal: Maintaining industrial competitiveness and jobs, as well as the transformation to climate-neutral mobility, must be considered together. Both the supporting effect of the Industrial Accelerator Act to improve the competitiveness of Europe and the Automotive Package with its more flexible and technology-neutral adjustments play a central role in this.

Now it is crucial to make the necessary improvements to the European Commission's proposals for the Industrial Accelerator Act and the Automotive Package. The fundamental agreement between Germany and France must now be transformed into common and concrete European rules that enable climate protection, mobilize investment, and secure industrial value creation and employment in Europe.

More details on the IAA:

The geographical scope begins with the EU27 and—under certain conditions—also includes the United Kingdom. There should be the possibility of including further countries based on narrowly defined exceptions and a clear, objective set of criteria.

With regard to the requirements for the localization of traction batteries, the proposal is a step in the right direction. However, the localization of battery cells and components in Europe should not be mandatory for passenger cars until 2031 at the earliest, and not from 2028 as proposed. An earlier start date could mean that some electric vehicles produced in Europe would no longer be eligible for subsidies, despite a high European value-added component.

Any further increase in requirements, as announced in the compromise document for 2034, should be aligned with whether and how it is necessary to achieve the goals associated with the IAA.

As was already the case in the Commission's draft, the specific characteristics of the commercial vehicle sector are unfortunately not taken into account in the Franco-German paper either. Overall, the structural features of commercial vehicles and buses, such as those of multi-stage vehicles or regarding threshold values, need to be addressed more thoroughly.

More details on the Automotive Package:

Adjusting the CO₂ fleet limit to minus 90% in 2035 is appropriate. Particularly positive is the recognition of vehicles as zero-gram vehicles (VEEF) that are exclusively fueled with renewable fuels.

Unfortunately, other key adjustments proposed by our industry to the EU Commission's Automotive Package are only partially reflected. The agreement between Germany and France falls short of necessary adjustments. This applies particularly to the crediting of renewable fuels (CCM) and the voluntary crediting of green materials. Both must be implemented as supplementary measures and at an early stage.

Furthermore, a later start to averaging would not provide companies with the necessary flexibility in time. Therefore, the period should begin in 2028 for a duration of five years and without the planned cap, especially since this multi-year offsetting mechanism will not result in any additional CO₂ emissions.

It is right to suspend the tightening of the utility factor. However, a mere three-year suspension of the stricter utility factor is insufficient. It would not do justice to the long-term importance of plug-in hybrids, especially for the German and European automotive supply industry and the jobs they provide. This technology will also continue to be of great importance worldwide.

Regarding the proposal for supercredits for battery-electric vehicles: A narrowing of the mechanism to a single length criterion is unacceptable. Furthermore, a supplementary expansion to include steel and aluminum is not a sufficient substitute for a genuine green materials mechanism and therefore does not generate enough positive effects for green lead markets.

The statements regarding binding corporate fleet quotas remain unclear, and we continue to consistently reject them.

Furthermore, the specific challenges posed by light commercial vehicles are insufficiently considered. This segment, in particular, requires independent adjustments to target values for 2030 and 2035. Moreover, fleet regulations for heavy commercial vehicles must now be adapted swiftly.

We will further analyze the joint Franco-German initiative and initiate discussions on it.“