‘Recession for the rest of our lives’ – CEO warns EU against phasing out combustion engines by 2035

European Commission President Ursula von der Leyen, center, speaks during a media conference at the EU headquarters in Brussels. The EU is moving forward with its "Green Deal." (AP Photo/Valeria Mongelli)
By John Cody
4 Min Read

The EU’s decision to ban the production of cars that run on diesel and gas in 2035 represents a major economic threat to Europe, warns Lars Carlstrom, CEO of battery manufacturer Italvolt. Despite his company’s role in producing batteries for electric vehicles, he said such a ban could bring about a “recession for the rest of our lives.”

“Regarding the end date for combustion engine cars in Europe of 2035, I am worried about the European car industry, I don’t think everyone will have time to adjust,” he said to the automobile website Recharge.

“If we lose millions of jobs, we will have a recession for the rest of our lives. I think we need to have a smoother transition, maybe from 2040 to 2045?” he continued. When the magazine points out that he runs a battery manufacturer that would theoretically benefit from an earlier shift to electric vehicles, he defends his position, saying “We have to be realistic.”

A major factor is also building the required infrastructure to support mass adoption of electric vehicles, which he argues is not in place, saying: “The electricity networks are not designed for all cars to run on electricity, especially not in the USA.”

“Energy storage systems are required to sort this out. The need for energy storage will not be able to be satisfied in the next 10 years, even if manufacturing increases rapidly. Large stocks are needed, also at the charging stations.”

The CEO also warns that the batteries in today’s electric vehicles are not good enough to compete with internal combustion engines and that the technology needs to mature further, with the winter presenting a special challenge due to its role in reducing the performance of electric vehicles. However, he predicts that within five years, there may be new technology in the form of solid-state batteries.

“To bring everyone along, we need faster charging and longer ranges in the winter. That means we have to have solid state, which is coming within five years,” he said.

He also notes that China’s transition towards electric is already in full swing, saying, “China is already there with its transition, that is the problem. Their decision times are, for example, much shorter. There, you can open a new mine in 1.5 years, here it takes 20 years.”

He notes that China’s support for its car industry, coupled with unfair protectionism, presents major challenges for Europe. In addition, European automakers have already passed on much of their technology and expertise to Chinese producers.

When asked about the threat of climate change, he responds that “cars are not the biggest problem, for example, we have a number of coal power plants that are running around the world.”

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