The European Union is serious about reducing emissions from cars and trucks. While the US government is busy turning back the clock on emissions regulations, officials in Europe have decided to toughen them. The German auto industry was prepared for a standard that would lower the amount of emissions permitted by 30% between 2021 and 2030, but the rules promulgated recently by the EU call for a 37.5% reduction instead. The standard for light commercial vehicles is a 31% reduction.
Volkswagen head Herbert Diess told the press last week that to meet the new goal, his company will need to sell 600,000 more electric cars a year in Europe than it had planned on selling. His company had calculated it would need to sell 1.2 million EVs a year by 2030 to meet the 30% target. The new, more stringent target means it will need to sell 600,000 more than that each year for a total of 1.8 million electric car sales annually.
“The plan we have drawn up for transition is not enough to fulfill this transformation,” Diess told the German press, according to a report by Handelsblatt. Volkswagen sells about 4 million cars a year in Europe, which means the new goal will represent 45% of sales at current levels.
The German Association of the Automotive Industry (VDA) warns the EU targets are unrealistic and could harm domestic competitiveness. The German auto industry provides 436,000 jobs in the local economy. There are many more jobs in other industries that are associated with auto manufacturing, like sales, transportation, and parts suppliers. “The regulation demands too much while promoting too little,” the VDA said in a statement. “Nobody knows today how the agreed limits can be achieved in the time given.”
Fortune says unnamed sources in Wolfsburg, where Volkswagen has its headquarters, claim the company will need to add at least 7 more all-electric models to its portfolio and build at least one more factory dedicated to the manufacture of electric cars to meet the new sales targets. That’s on top of the nearly $50 billion the company has already committed to in its plan to become a major EV manufacturer by 2025.
The VDA warnings are not wrong. As the world transitions to renewable energy and electric transportation, many traditional jobs will be eliminating, meaning nations will need to provide significant retraining programs to help those who become unemployed in one industry learn the skills they need to find jobs in others. We all want lower global emissions, but the human costs must be managed in an equitable fashion during the transition.