Exiting the EV battery is a bigger challenge than banning combustion engines in the EU, VW says

The comment came after EU countries reached agreements on Wednesday morning on proposed laws to tackle climate change, including one requiring new cars sold in the EU to emit zero CO2 from 2035.

This would make it impossible to sell cars with internal combustion engines.

The European Commission had first proposed the package last summer, aimed at reducing global warming emissions this decade, but the overnight agreement makes it likely that the proposal will become European law.

“It’s a tough goal. We think it’s doable,” VW chief financial officer Arno Antlitz told Reuters in an interview at the Reuters Automotive Europe conference on Wednesday.

“The toughest topic is not the ramp-up of auto factories. The toughest topic will be the ramp-up of the battery supply chain.”

VW has said it will stop selling combustion engine cars in the region under the target, but some automakers further behind in the race to develop electric vehicles such as Toyota may struggle to meet the target . The Japanese automaker declined to comment on Wednesday.

Major automakers have been scrambling to secure the supply of battery cells, but finding enough battery raw materials may be a bigger issue.

Failure to secure sufficient supplies of lithium, nickel, manganese or cobalt could slow the shift to electric vehicles (EVs), make such vehicles more expensive and threaten automakers’ profit margins.

Stellantis CEO Carlos Tavares said last month he expects a shortage of electric vehicle batteries to hit the auto industry in 2024-25 as manufacturers try to boost sales of electric vehicles. electric vehicles while building new battery factories.

The deal in Luxembourg came after more than 16 hours of negotiations, with Italy, Slovakia and other states wanting the phaseout to be delayed until 2040.

The countries eventually backed a compromise that kept the 2035 target and asked Brussels to assess in 2026 whether hybrid vehicles could meet the target.

The 2035 proposal is designed so that in theory any type of car technology, such as hybrids or cars running on sustainable fuels, could comply, as long as it means the car does not emit carbon dioxide. of carbon.

The Commission’s 2026 review would assess technological progress in hybrid cars to see if they can meet the 2035 target.

(Reporting by Ilona Wissenbach, Jan Schwartz and Joe White in Munich; Additional reporting by Nick Carey in London, Kate Abnett in Brussels and Satoshi Sugiyama in Tokyo; Writing by Josephine Mason in London; Editing by David Evans)

By Ilona Wissenbach and Jan Schwartz

Kevin A. Perras