🚗 Europe confirms the end of the internal combustion engine in 2035 - what does this mean for European carmakers? ⚡

European Commission has confirmed its plan to completely phase out the sale of new cars with internal combustion engines from 2035. The move is part of a wider strategy to decarbonise transport, but comes at a time when the popularity of electric cars is slowing and carmakers are facing pressure not only in Europebut also from abroad.

Major European players in the car market include Volkswagen Group $VOW3.DE, Mercedes-Benz Group $MBG.DE, BMW Group $BMW.DE, Stellantis $STLA and many others.

Key Decision Points:
EC is able to provide up to €1.8 billion (approx. CZK 45 billion) for the development of the supply chain for raw materials for battery production

Continued zero CO2 emissions for new cars from 2035, but with pragmatic adjustments to fines for carmakers

Carmakers to report compliance with emissions targets over a three-year period instead of an annual check

Increased support for domestic battery production to avoid Europe's dependence on China

📉 The challenges facing the European car industry:
Declining demand for EVs, I think customers are hesitant mainly due to higher prices than for internal combustion vehicles and limited infrastructure.

Strong competition from China. Chinese manufacturers offer more affordable EVs, threatening European brands

The imposition of additional tariffs by the US on European carmakers would have the biggest impact on Germany, but also on the Czech Republic because of the supply chain.

📊 Important numbers:
The automotive industry accounts for 7% of EU GDP, even 9% in the Czech Republic

It employs 13 million people directly and indirectly in the EU, half a million in the Czech Republic

Share of the car industry in Czech exports: 24%

However, some car companies are slowing down investments in EV and focus more on hybrids.

A transformation of the whole market can be expected. However, not all car companies can cope with the pressure of regulations, rising costs and changing demand.

Not only car manufacturers but also supply chains will be interested. Raw material extraction, battery technology and recharging infrastructure will be key segments.

The next question comes with sports cars, where we are still counting on the screaming 6-12 cylinder, what will the future look like for say Ferrari $RACE, or will they start running cars on synthetic fuels, reducing their carbon footprint?

For example, in Formula 1 are considering a return V10 because of its irresistible sound to increase interest in motorsport. However, the condition is the use of synthetic fuels... so we'll see if that works out.

How do you think the European car companies will handle it?
Will 2035 mean the end of the internal combustion engine or will there be another rule change?