“In electric vehicles, it is time to end a form of naivety in Europe”

Four long years. As the Paris Motor Show starts today at the Porte de Versailles, it’s an understatement to say that aficionados of beautiful mechanics are on a fever pitch before heading through the turnstiles for this 2022 edition, which will open tomorrow to the general public. The pandemic having prevented the 2020 edition from taking place, the last Parisian show was in fact held in 2018. Another era. Almost another world. In a particularly turbulent context for the automobile planet, between forced march electrification, rising energy costs and semiconductor shortages, the 2022 edition seriously reduced the sails: from 11 days in 2018, the high mass was reduced to 7 days. For the occasion, Luc Chatel, president of the automotive platform (PFA), spokesperson for the 4,000 players in the tricolor sector with the political world and co-organizer of the World Cup, discusses the great challenges of the automotive industry.

L’Express: The Volkswagen and BMW groups have decided not to come to the Paris Motor Show, Stellantis will only present 3 of its 14 brands… Are the big show hours a thing of the past?

Luc Chatel : We are clearly witnessing a change in behavior on the part of historic manufacturers. They want to make sure that for every euro spent they get a return on investment and organize their own side events. This movement impacts all automotive exhibitions. The Geneva International Motor Show has all but disappeared, the Frankfurt Motor Show tries to reinvent itself in Munich, while the Detroit Motor Show has become a regional event. But I’m not worried about the Paris Motor Show, because the car remains and will continue to be an object of passion. Remembering, in the first four places of the ranking of the favorite brands of the French, we find three automotive claws! This meeting with the general public remains fundamental.

Limited offer. 2 months for €1 without commitment

But the Paris Motor Show still had to reinvent itself to adapt to this new situation…

Yes, this edition is very different from the previous one. For starters, it’s much shorter: we went from 11 days in 2018 to 7 days in 2022. This reduces costs for participants in the same proportion. Furthermore, the time for “cathedrals” is over, which could sometimes cost several tens of millions of euros. Society has changed. She asks for more sobriety. Above all, the fair is adapting to new business in an industry undergoing unprecedented transformations. This results in the arrival of unexpected exhibitors four years ago. Whether they are new entrants – I am thinking, for example, of the French Hopium and its hydrogen vehicles – or [NDLR : BNP, Crédit agricole…], who are becoming full-fledged players in the sector. Once again, the Mondial de l’auto is the showcase of its time.

“The time for ‘cathedrals’ is over”

BYD, Great Wall, Leapmotor, Seres… This 2022 edition is also marked by the strong arrival of Chinese manufacturers.

China is the biggest automotive market on the planet. And in more than twenty years, local builders have managed to increase their skills spectacularly. Forty years ago we saw the wave of Japanese brands crash, and twenty years later that of Korean brands. Now it’s the Chinese manufacturers’ turn to conquer the world: they made their first discreet entry last year at the Munich Motor Show and are now arriving in Paris in greater numbers.

“50% of the electric technology value chain is in China”

Europe’s choice to forcibly electrify its car fleet, by banning the sale of new thermal vehicles from 2035, has also opened the door for them…

The automotive industry has always provided solutions to the challenge of climate change. In twenty years, CO2 emissions from new vehicles have been cut in half and NOx (nitrogen oxide) emissions by six! Of course, we were therefore in favor of further accelerating our efforts while maintaining technological neutrality. The European Parliament and the Council decided otherwise, opting for the all-electric one. I also emphasize that this is the first time in history that the policy imposes a technological choice on the private sector.

We are moving away from combustion, a technology born in Europe and which we have mastered perfectly, to electricity, even though 50% of the value chain for this technology is in China. And up to 75% if we stick with just the battery! We are basically sinking some of our industrial sovereignty. We take note of this, and the European auto industry will be ready for 2035. Just look at the number of electric models offered by manufacturers to convince yourself of this.

Certainly, but the price of these models is still very high, while inflation erodes the purchasing power of buyers a little more each day…

The real question, indeed, is how to guarantee freedom of movement for everyone who made the automobile successful in the 20th century? Today, electric models remain significantly more expensive than their thermal equivalents, and that gap is expected to last 5-7 years. However, 87% of French people still need their car on a daily basis. This means that the State will have to permanently compensate for this price difference with aid if we are to achieve the switch to electricity. The announcement by the President of the Republic of the increase in the ecological bonus, which will increase from 6,000 to 7,000 euros for half of the households, will make it possible to contribute to it. There is also the issue of the charging station network. Will there be electric stations in every small town tomorrow? For now, we are still far away, with 72,000 terminals. For the record, the goal was 100,000 by the end of 2022, and originally that milestone was supposed to be reached by the end of last year… But let’s be positive. We are already seeing clear progress, particularly in the network of ultra-fast terminals located on main roads, which is becoming increasingly dense. We cannot take the risk of mobility at different speeds, depending on the territory in which we live or the income we receive. From this point of view, the announcements regarding the bonus, but also the tariff shield extended to recharges at electrical terminals, are measures that we have proposed and that go in the right direction. Finally, when the President of the Republic speaks of reinforcing the “European preference” in favor of aid for the purchase of vehicles assembled in Europe, I understand that he takes note of a change in the balance of world trade. It’s time to end a form of naivety in Europe: the world has changed, regaining our sovereignty is a priority.”

Could the impetus for the purchase of an electric vehicle go through a long-term rental contract at 100 euros a month, as Emmanuel Macron had promised during the presidential campaign?

We are discussing with the government to see how to assemble this device, which can actually help a certain number of French people, among the less well-off, to convert to electricity. The problem is not so much the monthly rent: there are already similar offers. But this requires first paying a first rent of several thousand euros. This brake must be lifted. (Emmanuel Macron confirmed to Les Echos on Monday that this device is expected to launch in the second half of 2023, Ed)

“For three years we have chained crisis after crisis”

We talk a lot about the challenge of the electric revolution, but the automotive sector is also experiencing, like the entire industry, a conjunction of unprecedented crises…

It is true that three years ago we went through crisis after crisis. First there was Covid, then the semiconductor supply disruptions, then the war in Ukraine which disrupted logistics and restricted access to various metals. And since the spring, we have had to face a major energy crisis. This rise in the price of energy is of particular concern to us as industrial bills have increased fivefold and sometimes even tenfold! The risk of seeing the sector’s SMEs go bankrupt is very real. Here, the State has a role to play, with tariff shield-type protection to safeguard the French industrial fabric. It is also necessary for all players in the sector to show solidarity, even if times are difficult.

Semiconductor shortages have forced manufacturers to reduce production, resulting in lead times ranging from six to nine months. Is the worst of the crisis behind us?

Unfortunately, the situation remains tense. In 2022, on a European scale alone, this shortage will prevent the production of 1.4 million vehicles. And that tension will continue for several months. We expect a return to normal within a year. But the sluggishness of the automotive market (-32% in France in the first nine months of the year compared to 2021) is not only due to the shortage of semiconductors. We clearly see a postponement of purchases. People are anticipating a possible economic crisis, but they are also wondering whether to opt for a thermal or electric vehicle.

According to some experts, in addition to the economic crises, the car market will inexorably contract, particularly as a result of the development of car-sharing and, more broadly, a form of disenchantment with the car. Do you share this review?

This prediction seems to me a little quick, even risky. To begin with, we must not confuse the situation of mature continents, such as Europe, with that of emerging continents. I myself think, on the contrary, that demand will inexorably increase because it will not prevent, tomorrow, the Chinese, the Indians, the Indonesians, then the Africans, from wanting to buy a car and the freedom of movement that goes with it. In mature countries, like France, there is indeed a revolution in use. More and more consumers are shifting from ownership to using mobility. And the manufacturers understood this perfectly: Stellantis offers its mobility brand Free2Move and Renault has launched Mobilize. The boundary between services and industry is blurring. This explains the arrival of banking players, which are also very present at the Paris Motor Show. Once again, the sector is undergoing historic changes and the Paris Motor Show is a showcase for this new automotive world.


opinions

The chronicle of Aurelien Saussay

French President Emmanuel Macron answers questions from journalists in Brussels ahead of an energy-focused EU summit on October 20, 2022.By Aurélien Saussay, researcher at the London School of Economics, environmental economist specializing in energy transition issues

The chronicle of Cécile Maisonneuve

By Cécile Maisonneuve, President of DECYSIVE and Advisor to the IFRI Energy-Climate Center

chronicle

The new Italian Prime Minister Giorgia Meloni upon taking office on October 23, 2022 in RomeBy Marion Van Renthergem

The chronicle of Frédéric Filloux

TikTok wore Facebook's dirty laundry.  Credit: Jérémie LucianiFrederic Filloux

Leave a Comment