The European automotive industry is at a turning point. The electromobility megatrend and the EU's ambitious climate targets are demanding fundamental changes. Manufacturers of light commercial and special vehicles in particular must adapt their strategies in order to remain competitive. Targeted partnerships and networks can be of great benefit here.
The European Green Deal introduced in 2019 marks a turning point: it calls for drastic emission reductions and aims to make the EU climate-neutral by 2050. In the transport sector in particular, emissions targets will become increasingly ambitious in the coming years – and this is just the beginning. The latest findings and the upcoming revision of the climate targets by the new EU Parliament elected in summer 2024 could result in even stricter measures.
In order to achieve the EU's climate targets, vehicle manufacturers are faced with strict reduction targets for CO2 emissions from their fleets. EU Regulation (EU) 2019/631, most recently tightened by Regulation (EU) 2023/851, sets clear emission targets:
Passenger car (class M1):An exception applies until 2030 for manufacturers with fewer than 1,000 new registrations per year, who can apply for separate emissions targets. These staggered CO2 targets pose immense challenges for the automotive industry and make rapid adaptation of production towards zero-emission and low-emission vehicles unavoidable.
Manufacturers of special-purpose vehicles such as ambulances, mobile homes, hearses, wheelchair-accessible vehicles and other special-purpose vehicles are exempt for the time being in accordance with Article 2(3) of EU Regulation 2019/631. This regulation does not apply to special purpose vehicles as defined in Annex II, Part A, point 5 of Directive 2007/46/EC. This exemption is intended to take account of the special requirements and special use of these vehicle types and offers manufacturers in this segment relief for the time being.
An important factor in the competitiveness of the automotive industry is the OEM supply chain.
Complexity of the components:
In order to utilise existing production volumes and ensure the delivery capability of production, capacities for components must be planned and purchased several years in advance. In the current dynamic environment of e-mobility, this is associated with a faster component life cycle (battery chemistry, energy management, power electronics, e-motor production, etc.).
Shorter product cycles:
As the life cycles of components are shortening rapidly, new products may already appear outdated as soon as they reach the market. This reduces the benefits for end users and impairs the competitiveness of body manufacturers, who have to rely on the latest technologies in order to survive in the market.
Companies are working intensively on reducing the costs of battery chemistry and related processes. The Fraunhofer ISI article on alternatives to lithium-ion batteries: Potentials and challenges of alternative battery technologies provides a good overview. The extension of the product life cycle and the cycle stability of batteries through improved cathode/anode materials or hardware solutions (e.g. modular microinverters) are currently being implemented by technology companies such as Bavertis.
The established manufacturers of vehicle chassis in the N1 class, such as panel vans and platform trucks, are primarily focussing their development on the mass market. Some suppliers, including Fiat, have shown themselves to be flexible towards the requirements of body manufacturers in the past and are likely to retain this adaptability. However, it remains to be seen whether this flexibility will be sufficient for the specific future challenges of light commercial and special vehicles.
The pressure on the industry is increasing with the growing requirements for emission reductions and the increasing technological challenges in special vehicle construction. The development of modular and efficient e-solutions that meet the requirements of special vehicle manufacturers is not yet sufficiently competitive.
In this dynamic situation, manufacturers of special vehicles must increasingly invest in the field of e-mobility themselves and build up targeted partner networks in order to customise their products and set them apart from the competition. This is an essential step in order to remain competitive in the long term and continue to fulfil the special requirements of their customers.
This increases the pressure not only on manufacturers, but also on municipal and public organisations, which will have to comply with even stricter quotas from 2024 following the first amendment to the Clean Vehicles Procurement Act. This also affects private sector players that provide certain public services, such as postal and parcel services, city cleaning and passenger transport.
This change will not remain without effect on the private vehicle market. As commuters and service providers increasingly use zero-emission vehicles in their everyday lives, the expectation that leisure vehicles will also become more climate-friendly is growing. For the industry, this means that the development and provision of practical, emission-free solutions must continue at full speed in order to meet these increasing demands.
Special vehicle manufacturers are facing a change: as they have traditionally been dependent on chassis manufacturers' drive units, they often lack their own expertise in the field of e-mobility. At the same time, this expertise is in high demand in the automotive industry. Increasing technical complexity, the lack of mature e-solutions and increasingly strict regulations pose considerable challenges for smaller manufacturers in particular, as they lack the economies of scale of large suppliers.
The industry must therefore invest more in practical and market-ready solutions in order to individualise products to a greater extent and stand out better from the competition in future. Manufacturers of customised vehicles must do more to achieve their emissions target for 2030 in order to remain competitive and build up competent partner structures and personnel capacities.
At the same time, opportunities are opening up for new technology suppliers to establish themselves as innovative partners in the supply chain. Such partnerships can be developed in innovation networks such as those managed by EurA AG. If you are interested, please contact our mobility experts.
Text: Dr. Viktor Schneider
EurA AG
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