VW chief hits out at EU over transformation red tape

The CEO of Volkswagen Passenger Cars has urged Europe to slash through its red tape as he fears the European Union will become uneconomic for car manufacturers seeking to transition towards a sustainable future.

In a social media post, Thomas Schäfer, who is also a member of the board at Volkswagen AG, described the competitiveness of Europe and Germany to be a fundamental issue.

“As CEO of the Volkswagen brand and group board member for the brand group Volume (VW and Volkswagen Commercial Vehicles in Germany, SEAT,SA/CUPRA in Spain, and ŠKODA AUTO a.s. in the Czech Republic), I am deeply concerned,” he said.

He added: “The fact is: On the international stage, Germany and the European Union are rapidly losing their attractiveness and competitiveness. The USA, Canada, China, Southeast Asia and regions like North Africa are forging ahead. We are treading water. I am very concerned about the current development regarding investments in the industry’s transformation. This needs to be urgently prioritised – unbureaucratically, consistently and quickly.”

The soaring cost of energy was in danger if making the EU unviable for new elective vehicle battery plants, Schäfer warned.
“Europe lacks price competitiveness in many areas. When it comes to the cost of electricity and gas, in particular, we are losing more and more ground. Unless we manage to reduce energy prices in Germany and Europe quickly and reliably, investments in energy-intensive production or new battery cell factories in Germany and the EU will be practically unviable. The value creation in this area will take place elsewhere.

“I find it alarming that the European Union with its regulatory framework is not well positioned for the industry’s transformation that is now underway. With the Inflation Reduction Act, the USA offers companies highly attractive incentives to invest in new plants and production. The EU, on the other hand, is sticking to outdated and bureaucratic state aid rules that promote regions rather than preserving and transforming entire industrial sites. And new strategic instruments like IPCEI tend to focus on the long-term development of new technologies rather than the short-term ramp-up, scaling and industrialisation of production.”

He added: “The point is: We have no time to lose. The EU urgently needs new instruments to avert insidious de-industrialisation and to maintain Europe’s attractiveness as a location for future technologies and jobs!

“Will we succeed in this tour de force? We have to succeed! Because ultimately, we all want Europe to remain an industrial and technological powerhouse! At VW and in the brand group Volume, we are ready to make our contribution!”