{"id":758,"date":"2021-05-04T05:18:18","date_gmt":"2021-05-04T03:18:18","guid":{"rendered":"https:\/\/info.openlane.eu\/phasing-out-combustion-engines-between-political-ambition-and-reality\/"},"modified":"2024-11-15T08:12:13","modified_gmt":"2024-11-15T07:12:13","slug":"phasing-out-combustion-engines-between-political-ambition-and-reality","status":"publish","type":"post","link":"https:\/\/info.openlane.eu\/en\/company-information\/blog\/company-news\/phasing-out-combustion-engines-between-political-ambition-and-reality\/","title":{"rendered":"Phasing out combustion engines: between political ambition and reality"},"content":{"rendered":"<section class=\"l-section wpb_row height_medium\"><div class=\"l-section-h i-cf\"><div class=\"g-cols vc_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"g-cols wpb_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\" style=\"--columns-gap:3rem;\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"wpb_text_column\"><div class=\"wpb_wrapper\"><h1>Phasing out combustion engines: between political ambition and reality<\/h1>\n<\/div><\/div><div class=\"w-separator size_custom\" style=\"height:1rem\"><\/div><div class=\"wpb_text_column\"><div class=\"wpb_wrapper\"><p>Article written by Effective Media. The analyzes and opinions expressed in this article are those of the author only and not those of OPENLANE Europe.<\/p>\n<\/div><\/div><div class=\"w-separator size_custom\" style=\"height:1rem\"><\/div><time class=\"w-post-elm post_date us_custom_d8432ea1 has_text_color entry-date published\" datetime=\"2021-05-04T05:18:18+02:00\" itemprop=\"datePublished\"><i class=\"far fa-clock\"><\/i>04 May 2021<\/time><\/div><\/div><\/div><div class=\"w-separator size_medium\"><\/div><div class=\"g-cols wpb_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\" style=\"--columns-gap:3rem;\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"wpb_text_column\"><div class=\"wpb_wrapper\"><p><strong>You can read it almost daily in the press: within a few years we may all be driving electric vehicles and that also means that combustion engines are working on their swan song. But is that really so? However, due to several factors, the debate is a bit more nuanced.<\/strong><\/p>\n<\/div><\/div><\/div><\/div><\/div><div class=\"w-separator size_medium\"><\/div><div class=\"g-cols wpb_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\" style=\"--columns-gap:3rem;\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"w-image align_none\"><div class=\"w-image-h\"><img decoding=\"async\" width=\"778\" height=\"248\" data-src=\"https:\/\/info.openlane.eu\/wp-content\/uploads\/2021\/05\/banner.png\" class=\"attachment-large size-large lazyload\" alt=\"Blog: Phasing out combustion engines\" data-srcset=\"https:\/\/info.openlane.eu\/wp-content\/uploads\/2021\/05\/banner.png 778w, https:\/\/info.openlane.eu\/wp-content\/uploads\/2021\/05\/banner-300x96.png 300w\" data-sizes=\"auto, (max-width: 778px) 100vw, 778px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 778px; --smush-placeholder-aspect-ratio: 778\/248;\" \/><\/div><\/div><\/div><\/div><\/div><div class=\"w-separator size_medium\"><\/div><div class=\"g-cols wpb_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\" style=\"--columns-gap:3rem;\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"wpb_text_column\"><div class=\"wpb_wrapper\"><p>In most European countries, we see the same trend towards phasing out combustion engines like low-emission zones in more and more large cities and a ban on diesel engines. This evolution is further supported by more and more manufacturers who are announcing that they will stop developing combustion engines and switch completely to electric in the coming years. So, it looks like we will all be plugging in instead of refueling within 10 to 15 years at the latest. But is that realistic?<\/p>\n<h2>Counteract<\/h2>\n<p>Although manufacturers such as<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/car-makes\/ford\" target=\"_blank\" rel=\"noopener\"><span>Ford<\/span><\/a>,<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/car-makes\/jaguar\" target=\"_blank\" rel=\"noopener\"><span>Jaguar<\/span><\/a><span>\u00a0<\/span>and<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/car-makes\/volvo\" target=\"_blank\" rel=\"noopener\"><span>Volvo<\/span><\/a><span>\u00a0<\/span>are fully committed to electrification, there are other brands that are counteracting. Akio Toyoda, the CEO of<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/car-makes\/toyota\" target=\"_blank\" rel=\"noopener\"><span>Toyota<\/span><\/a>, recently stated that not everyone will be able to drive electric by 2040. The Japanese manufacturer points out that many regions where it sells its cars, such as Asia, Latin America and Africa, will not have the infrastructure to run electric and hydrogen cars by 2040. That is why the largest manufacturer will continue to invest in the development of environmentally and climate-friendly combustion engines in the coming years. The same is true for Carlos Tavares, the CEO of Stellantis, the group that has brands such as<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/car-makes\/fiat\" target=\"_blank\" rel=\"noopener\"><span>Fiat<\/span><\/a>,<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/car-makes\/opel\" target=\"_blank\" rel=\"noopener\"><span>Opel<\/span><\/a>,<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/car-makes\/citroen\" target=\"_blank\" rel=\"noopener\"><span>Citro\u00ebn<\/span><\/a>,<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/car-makes\/peugeot\" target=\"_blank\" rel=\"noopener\"><span>Peugeot<\/span><\/a>,<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/findcar?makesModels=DS\"><span>DS<\/span><\/a>,<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/car-makes\/alfa-romeo\" target=\"_blank\" rel=\"noopener\"><span>Alfa Romeo<\/span><\/a><span>\u00a0<\/span>and<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/car-makes\/jeep\" target=\"_blank\" rel=\"noopener\"><span>Jeep<\/span><\/a><span>\u00a0<\/span>under its wings. He argues that rapid electrification will lead to major job losses for all automakers as fewer workers are needed to build electric cars. He said in an interview with Reuters that the automotive industry is being forced into electrification, but the production of those<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/findcar?fuelTypes=Electric\" target=\"_blank\" rel=\"noopener\"><span>electric vehicles<\/span><\/a><span>\u00a0<\/span>is 50% more expensive than conventional cars. \u201cWe can never pass on this additional cost to the customer, because the middle class can no longer afford this,\u201d said Tavares.<\/p>\n<h2>Cost for company cars vs. private individuals<\/h2>\n<p>Price is indeed a crucial factor. Let\u2019s take<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/origin\/used-cars-belgium\" target=\"_blank\" rel=\"noopener\"><span>Belgium<\/span><\/a><span>\u00a0<\/span>as an example: there is mainly an accelerated electrification of company cars because by 2026 all tax incentives for combustion engines will disappear. That leverage does not exist with the private individual. A private individual who opts for an electric car today will in most cases pay a higher price for it, while they still do not have the range that can compete with that of combustion engines. The latter is certainly the case compared to diesels. The selling point for electric cars today is \u2013 to put it mildly \u2013 not overwhelming towards individuals. This discord is also apparent from the most recent figures from the Belgian sector federation of importers, FEBIAC, on registrations in 2021.<\/p>\n<p>For the first time, electrified cars were on a par with<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/findcar?fuelTypes=Diesel\" target=\"_blank\" rel=\"noopener\"><span>diesel cars<\/span><\/a>. The latter accounted for a share of 23.7% in 2021 \u2013 a decrease of 9.2% compared to the previous year. All electrified vehicles, i.e. fully<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/findcar?fuelTypes=Electric\" target=\"_blank\" rel=\"noopener\"><span>electric<\/span><\/a>, full<span>\u00a0<\/span><a href=\"https:\/\/www.adesa.eu\/en\/findcar?fuelTypes=Hybride\" target=\"_blank\" rel=\"noopener\"><span>hybrid<\/span><\/a><span>\u00a0<\/span>and plug-in hybrid cars, together represented the same share of the registrations. So, the change is definitely noticeable. But about nine out of 10 fully electric cars and plug-in hybrids were registered in Belgium in the name of a company or self-employed persons. Tax control therefore plays a major role. In other European countries there are allowances for private individuals. An example is Luxembourg, which offers private individuals a tax benefit of \u20ac5,000 for zero-emission vehicles and \u20ac2,500 for plug-in hybrids. In the Netherlands, the subsidy amount for a new electric car is \u20ac3,350. You can get a subsidy of \u20ac2,000 for a used car. Sweden, which gives different climate bonuses depending on the type of vehicle, has a market share of 32.2% electrically rechargeable vehicles. More examples can be found<span>\u00a0<\/span><a href=\"https:\/\/www.acea.auto\/figure\/interactive-map-electric-vehicle-purchase-incentives-per-country-in-europe-2021-update\/\" target=\"_blank\" rel=\"noopener\"><span>here<\/span><\/a>.<\/p>\n<h2>And what about the second-hand market?<\/h2>\n<p>The transition to electrified vehicles will inevitably also have an impact on the second-hand market. A collapse of the second-hand market for vehicles with an internal combustion engine is not imminent, according to specialists from the leasing sector. Leasing companies are the perfect indicator because they put their end-of-contract cars on the market.<\/p>\n<p>The vast majority of those ICE cars (ed.: Internal Combustion Engines) still go abroad, especially Eastern Europe. And it should remain that way for a few more years because the greening process is slowing down there. Ultimately, the supply of ICE cars will be smaller than the demand. And according to the leasing companies, the second-hand market for electric cars (EV) in those markets will not increase significantly in the coming years because 25,000 to 30,000 euros for a second-hand EV is too much for the budgets that can be spent there. In other words, it will likely be years before ICE vehicles fall out of favor on the second-hand market. As supply will gradually outpace demand, ICE used vehicles are anticipated to continue to be sought after and will likely also remain price-fixed.<\/p>\n<h2>Residual value of electric vehicles<\/h2>\n<p>Once more electrified vehicles enter the second-hand market, pricing will become an important factor. The depreciation is currently approximately the same as that of ICE cars. Electric motors are technically simpler than current combustion engines and also less prone to breakdowns and batteries today have a lifespan of at least eight to 10 years. In terms of second-hand value, that\u2019s good. The only uncertain factor is the development of technology. When a new type of battery comes on the market within two years that is superior to the current generation, you will have a problem because the second-hand market will be using the older battery. There is hope: cross-border sales \u2013 in which OPENLANE is very strong \u2013 could be a real opportunity for these vehicles, as they are more attractive in other European markets.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/section>\n","protected":false},"excerpt":{"rendered":"<p>Article written by Effective Media. The analyzes and opinions expressed in this article are those of the author only and not those of OPENLANE Europe<\/p>\n","protected":false},"author":1,"featured_media":19753,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[144],"tags":[],"class_list":["post-758","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-news"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Phasing out combustion engines: between political ambition and reality \u2013 OPENLANE<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/info.openlane.eu\/en\/company-information\/blog\/company-news\/phasing-out-combustion-engines-between-political-ambition-and-reality\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Phasing out combustion engines: between political ambition and reality\" \/>\n<meta property=\"og:description\" content=\"Article written by Effective Media. 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