José López Tafall, director general of the Spanish Association of Automobile and Truck Manufacturers (Anfac), sees well the change of course that the Government wants to give to Perte (strategic plan for economic recovery and transition) and emphasizes that the previous model was made with good intentions, but with excessive complexity.
Postponing the implementation of the Euro 7 regulations on pollutant emissions is now the most important short-term objective.
Yes, because neither the terms nor the detail of the text are acceptable, and for the Spanish industry it is quite harmful. This dossier should make a lot of progress during the Spanish presidency of the European Union and that is why the position of the Spanish Government, which also represents the second largest European automotive manufacturer, is very important. Therefore, it has a special responsibility.
And what reception have they found in the Government?
The receptivity in principle is good, what we are waiting for is that clear positions are specified in Brussels and in everything that is the processing of the file and eventually in the European Council, where the role of Spain is very important.
When he says streamline, does he mean delay?
There are several things about Euro 7 that are unacceptable. First, the implementation deadlines. A period of about two years should pass after all the development regulations are known, which is what really determines the scope of Euro 7.
And until what year would it be postponed?
In 2027 or 2028. It depends on when the rule is drawn up. In addition, it is necessary to bring to reality some of the test conditions that are foreseen, because things are being considered that are neither possible, nor tested and some have not been agreed upon.
Does it refer to the requirements with the components?
Yes, among other things. We want to double the durability of the components. This involves development and more costs.
What impact can it have?
Some of the brands that manufacture in Spain, partners of Anfac, have already warned that with the new standard as proposed they would have to stop production, because it is not possible to adapt the current equipment and vehicles to Euro 7. And investing in optimizing combustion engines that are already very efficient in themselves and in parallel developing everything that is the new electrification lines or batteries financially is not easy. There is no money for everything.
What other measures do you see as unacceptable?
It is also a priority for us to rationalize the CO2 regulations for industrial and heavy vehicles, which is also particularly important for a country like Spain, because a large part of our foreign trade depends on road transport. In this area we have a very, very low electrified vehicle penetration, I think it is 0.7%, and very important requirements to reduce CO2 emissions.
They are also negotiating with the Government for the new Perte. What improvements do you expect?
We have a very fluid relationship with the Secretary General of Industry, Pachi Blanco, and we share the same goal: that the more than 2,000 million Perte funds left over be used as soon as possible and serve to mobilize attractive investments. But without all the administrative and regulatory requirements that made the first call too complex.
How do you think now?
What we are told are two possible calls. One of the most focused on everything related to batteries, the refining of materials, minerals and all components. These projects would be part of the new European aid framework. Not the general one, but the specific time frame that has been established to deal with US aid competition. And there would be a second, slightly more open line of industrial policy within the framework of the general state aid regulation. Perte as a model disappears. It was a well-intentioned plan, but very difficult to pull off. We could say that it would be transformed into two mini perts or two lines of industrial policy with European support.
Does the sector see it well?
Yes, we see it well. The only caution we have is that tractor projects are effectively prioritized, in which a vehicle manufacturer must be involved, even in battery ones. Because the idea is not to manufacture batteries here for export, but for them to be used in factories in Spain. It wouldn't make much sense to allocate funds to a battery project that didn't have a tie-up with a car manufacturer because it would lack demand. In reality, any major investment project must also have the point of view of a car manufacturer. If not, you may end up encouraging projects that do not land on the market.
Is it necessary to negotiate the new model with Brussels?
What Indústria has told us is that much of this negotiation is very advanced and that is why they expect to issue some notices before the summer.
Can hybrid cars be included in the grants?
Manufacturers who want to produce hybrid vehicles in Spain must be helped to make these investments. And if European funds cannot be allocated, national funds must be applied.
The year has started better than expected.
Better than last year, not better than before the pandemic. We're doing better, but that doesn't mean we're doing well; we are around 30% down in sales and 13% down in production compared to 2019. The supply chain is starting to normalize, but there are still plant shutdowns.
When do you expect to recover the million units of sales?
We would like to recover the 1.2 million. This year, if the trend is consolidated, we could be above 900,000.
And the electric ones don't take off.
Ambitious goals cannot be set without ambitious measures. It is not only a question of money, but of efficiency so that it is spent well and reaches the citizens. Anfac has launched the 2023-2025 roadmap to catch up with the European average with tax measures to encourage citizens, a more agile Moves plan and more charging points. In Spain, electrified vehicles have a market share of around 10% compared to a European average of 22%. And if we continue at the rate we have, with which the quota is not growing, we will fall even further behind.
Do you see a future in synthetic fuels, e-fuels?
Time will tell if they are a niche solution or go a bit further. Right now it is not a real solution, the same as hydrogen, because it is very expensive and underdeveloped. We should not further confuse the consumer, who is already confused enough with technology and anti-private vehicle messages. The reality today tells us that the technology that is imposed, that is accessible and that complies with zero emissions, is electrical technology.
