Volvo Wants Better Incentives for EU Green Car Buyers

Volvo is mad at the EU. Volvo, at least outwardly, wants to cut CO2 emissions in Europe by 60% by 2050, and it feels that the EU is not doing enough to incentivize buying green cars. It also wants larger EU grants to study electricmobility for cars.

"The European automotive industry risks losing the present technological leadership if this doesn't happen. In the long-term, this jeopardizes our industry's competitiveness and European jobs," said Stefan Jacoby. 

It criticizes the EU for implementing rules that mandate electric or low CO2 cars without also setting incentives that make these cars affordable by normal people. 

"European car manufacturers are facing a very difficult challenge when CO2 legislation requiring electrified cars are implemented without initiatives that make these cars affordable for a growing number of consumers," said Jacoby.

Volvo also believes the individual governments in the EU are overestimating the speed at which electric cars can be implemented. In 2011, 50,000 pure electric vehicles were sold worldwide. A study by the EU Commission estimated that by 2020 electric and hybrid vehicles will make up between 3% and 4% of the car market. Volvo feels that without better consumer incentives and due to the high battery costs that this estimate is too high, and it feels that electric and hybrid vehicles will have just a 1% European market share by 2020. 

"The automotive industry's cost reduction efforts can't fully compensate for the additional battery system cost. Pan-European subsidies and incentives are needed to support a successful market introduction. Unfortunately such necessary initiatives are jeopardized by the current debt crisis," said Jacoby.

Volvo wants more cooperation between European auto companies and governments. It gives the example of China who has set aside $15 billion US to support its domestic automakers in building electric vehicles. 

It seems like Volvo may have a point, but there are two glaring counterexamples. Both the Prius C - or Yaris Hybrid in Europe - and the Renault Zoe that are reasonably priced green vehicles. Granted, Renault and Toyota would probably love extra money for research and development, but they seems to be doing fine without it. On the other hand, Nissan-Renault and Toyota are both massive automakers. Volvo is relatively small. It is going to be hard for more niche auto companies like Volvo to compete with the behemoths in research and development.