German car industry boss: EU is doing ‘anti-industry-policy’
The head of the German car industry association, Hildegard Müller, has criticised the EU for making vehicle production more expensive by political means, which in her view is undermining the bloc’s proclaimed industrial policy objectives.
Khodrocar - As concerns about industrial exodus have sparked debate in Brussels and Berlin on how to secure industrial production in Europe, the association of German carmakers has criticised the announced industrial policy for being "not yet in line with the needs of the industry”.
"I call for an industrial policy that unleashes, not a policy that makes decisions for companies,” Müller said at the yearly beginning-of-year press conference of the German automotive association VDA on Wednesday (11 January).
She added that political decisions should not determine "who prevails how and when”.
A "thought-through industrial policy” would not only ask "what is our objective?” but also "what do we need for that, and how can we reach that goal?” she said, adding that Brussels would often only do the first part.
"Other regions, the US, for example, unleash, we restrict,” she said, citing a stricter classification of the health risks of lithium, which would "curb battery cell production”, and proposed new norms for non-CO2 emissions of cars as examples.
The proposed Euro 7 standards would see the lowest level of emissions of pollutants like nitrogen oxides (NOx) and particulate matter foreseen in the previous set of rules made mandatory as of July 2025, a timeline which VDA has argued would not be possible to meet.
This would also distract investments from those made into the production of electric vehicles, which would instead need to go into combustion engine technology to fulfil the tighter emissions standards, Müller said.
"This is anti-industry policy and ultimately anti-climate policy,” she added.
Key challenges ahead
As key challenges for the transformation of the car industry, Müller described the availability of clean energy and critical raw materials,
For the latter, Müller would like to see a new "raw materials agency” being set up at the EU level to prevent new trade dependencies to emerge.
To provide the European car industry with new export markets, the EU should also strike more trade agreements with third countries, she said, mentioning African countries, Gulf states, Brazil and India as examples.
"We have to convince them of us and offer them more partnership than China, for example,” she said, adding that "moral perfection will not be achieved internationally on our own”.
"Moral determinations are often made without technical and economic expertise. However, this is necessary to find workable solutions,” she said.
Unlike China, the EU has increasingly insisted on upholding environmental and labour protection standards as part of trade deals – which has proven unpopular with some trading partners.
On the USA’s Inflation Reduction Act, which has driven concerns in Europe about a potential relocation of production, Müller said that "the US has recognised what it has to do for its business location”, although she would favour a different approach for Europe.
Of particular concern for the EU are requirements which link tax credits for electric vehicles to domestic production, which Müller called "protectionist and discriminatory”.
In late December, the US published a clarification on implementing the scheme for commercial operators, which the European Commission has welcomed as a "win-win for both sides”.
"EU companies that provide their customers through leases with cutting-edge clean vehicles can benefit from the incentives under the IRA,” the European Commission wrote in reaction to the US decision.
Müller described this as "only a drop in the ocean; a small, welcome step, but nothing more or less”.
The European Commission in December said that it would continue "to seek similar, non-discriminatory treatment of EU clean vehicle producers under the Clean Vehicle Credits of the Inflation Reduction Act”, the main element of the programme, directly targeting end consumers.
‘Mobility summit’ without concrete results
On Tuesday, German Chancellor Olaf Scholz invited representatives of the car industry, suppliers, trade unions and other stakeholders to what he called a "mobility summit”, mostly discussing the car industry’s future.
The summit has reiterated Germany’s ambition to get 15 million electric cars on the roads by 2030, but otherwise not yielded concrete results.
Asked whether she was disappointed by the outcome, Müller said that she was not, as "it was clear from the beginning that this was not the place where decisions are made”.
However, she said, "it was still possible to make it very clear how great the industrial policy challenge is”.
Müller also said industry representatives emphasised that it was urgent for Germany to be able to speak with one voice at the EU level, something that has not always been the case in recent months due to internal differences within the German governing coalition.
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