David Borland, EY UK & Ireland Automotive Leader, comments on EU’s ‘Fit for 55’ announcement and its impact on the automotive sector:

“As part of a delivering the European Green Deal, the European Commission released a proposal with more ambitious targets for the reduction of CO2 emissions. For cars, it means a reduction of emissions from -37.5% to -55% by 2030, with a move to 0% by 2035. This would effectively mean a sales ban of combustion engine vehicles in the EU.

“This is already the direction of travel across the automotive sector, and follows the recent announcements from manufacturers on the transition to zero emission vehicles, but it will act as a further catalyst for the change if approved by EU member states and the European Parliament.

“The importance of sectors working together is understood with a recognition that citizens also need the infrastructure to charge vehicles, which must consider the balance of public and private charging.

“While the announcements, alongside the UK’s commitment to ban the sale of petrol and diesel cars by 2030, are positive step towards net zero, they also present further challenges for companies still suffering the effects of the pandemic and supply chain issues. Automotive suppliers who are focused on combustion engine components will need to accelerate the transformation of their operations and products to meet the ever increasing demand for EVs. This is easier said than done for some, and while there will be winners across the sectors who are nimble and can adapt, others may struggle.”