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Each of these sports requires a new value chain, covering new materials, new players, a whole new world to understand, from raw material extraction to battery recycling.
This new, extended and fragmented playing field is also characterised by unprecedented volatility. For the internal combustion engine, the technology we were working with was mature and innovation incremental. Batteries are very different: a billion-pound investment in a gigafactory can be called into question overnight if a new chemistry pops up.
Raw material prices are also volatile. For example, the price of lithium has multiplied by 12 and divided by two in only three years. Finally, the regulations we’re working to are volatile, as illustrated by the recent debates – and subsequent regulation changes – about the Euro 7 emissions standard.
For the automotive industry, the age-old mantra was scale and efficiency. Now a new imperative has come to light: innovation and strategic agility. This is what car makers now have to put at the core of everything they do.
The new global geography I referred to at the start is also shaking our European certainties. With the internal combustion engine, our leadership was undisputed. For a century, we benefited from our expertise with this technology, and it was a barrier to entry for newcomers to the industry.
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Today, Europeans find themselves in a position of relative fragility. The Chinese control 75% of the world’s battery production and 90% of lithium refining.
In addition, while the Americans massively stimulate and incentivise the industry and the Chinese organise it through planning, we Europeans regulate, often with no coherence and without any holistic view of our challenges.
Of course, building our future as European car makers is first and foremost about entrepreneurial innovation on our side. We have to invent business models fit for the new playing field, invest in new technologies and offer products and solutions for an affordable and sustainable mobility.
Over the past three years, Renault has not stood idle. One of our proposals has been the creation of Ampere, our dedicated EV and software arm. This is the most substantial and comprehensive response from the European automotive industry to the challenges coming from both East and West.
However, today I’m deeply convinced that we also need a collective response and a public authority able to coordinate a European mobilisation if we want our automotive industry to perform to its full potential.
Having devoted all my career to this industry, I see the question set before us today as pretty simple: does Europe have the will to finally equip itself with a genuine industrial policy for our sector, with a holistic ambition, instead of just piling up deadlines and fines?
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In my view, this should be our top priority. We need a few clear principles and objectives, a plan and a dynamic review process so that we can constantly adapt, because what comes next will be no walk in the park.
As an antidote to the proliferation of diktats from the various authorities, let’s establish a one-stop shop for mobility and automotive regulations. Let’s foster the emergence of a framework of stable rules and standards across Europe, following the example of what the Chinese have successfully achieved.
Let’s put in place all the conditions for the emergence of structural projects and allow European champions to emerge in key technologies. Europe did it in the past: it is called Airbus.
It is just as urgent to finally coordinate the efforts of the many industries involved in the huge automotive transition that is already under way, because it is intertwined with challenges across other sectors, including those of the energy and digital sectors, which are undergoing their own revolutions.
For instance, the mining, chemicals, energy and manufacturing industries, plus infrastructure, national and local authorities all need to work together.
Their efforts have to be orchestrated across the entire value chain, from upstream to downstream. We also need to be alert to what our competitors are doing and to keep adapting. Faced with the challenge from China and the US, Europe must invent its own model.
A hybrid model between private initiative and public intervention should enable us first to protect and strengthen ourselves and then in the medium and long term go back on the offensive, always in a context of fairness and healthy competition.
European car makers are fully committed to decarbonisation: they are investing £200bn in electrification. But while they applaud the objective, they believe they should have a say about how it is achieved.
That could mean adopting a principle of technological neutrality, encouraging Europe’s 200 biggest cities to harmonise their mobility policies and setting up green economic development zones in each country to foster the emergence of industry or business clusters, where companies, innovators and suppliers can coexist to share resources and development.
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