Europe’s automotive sector, a long-standing pillar of its economic prowess, is facing a multitude of challenges. Trade disruptions, soaring energy expenses, shortages in raw materials, and declining demand for European vehicles are threatening the industry. Yet, the most pressing concern is the rapid ascent of non-European car manufacturers in global markets. The solution may lie in promoting electric mobility across Europe through a commitment to social leasing.
Despite some European car manufacturers clinging to the hope of more efficient combustion engines, history warns against such reliance. The fate of Nokia, once a mobile phone giant, illustrates the dangers of not evolving with technological advancements. To avoid a similar fate, Europe must shift focus toward electric vehicles (EVs).
The continent stands at a pivotal moment. The race to populate roads with green, European-made EVs is intensifying, with Chinese manufacturers posing a significant challenge. Recognizing this, the European Commission is taking action. In her State of the Union address, EU Commission President Ursula von der Leyen unveiled a ‘small affordable cars initiative,’ signaling a push for lightweight, eco-friendly, and affordable vehicles.
Currently, tax incentives and subsidies for EVs predominantly benefit those who can already afford them, such as bankers and lawyers. Meanwhile, many Europeans, especially those who would benefit most from affordable clean transportation like farmers and social care workers, find EVs out of reach. These individuals often rely on cars for their livelihoods, working in areas with limited public transport.
The race is on to put green, European-made, and affordable electric vehicles (EVs) on our roads—– before Chinese EVs seize the market entirely.
The Socialists and Democrats (S&D) Group in the European Parliament advocates for a European Social Leasing Plan to democratize clean mobility. This plan aims to make EVs accessible to low- and middle-income households through affordable monthly leasing fees, prioritizing those with limited transportation options.
Our European Social Leasing Plan
The initiative proposes a points-based system considering income, family size, residence, and commuting needs to ensure fairness. EU-made vehicles that meet stringent social, environmental, and data standards would be eligible. This approach not only supports citizens but also bolsters European industry.
Member states can take initiative without waiting for further directives. Their social climate plans already require measures addressing transport poverty, with social leasing being a recommended solution. However, coordinated action on a European scale would amplify effectiveness. A collective effort, similar to the joint procurement of Covid vaccines, could enable negotiations with manufacturers and leasing firms for a tailored European deal.
Three Birds with One Stone
A study by the Oeko-Institut suggests that from 2026 to 2032, social leasing could benefit up to three million households in select member states, potentially surpassing ten million across the EU over a decade. The advantages are multifaceted.
First, it strengthens the automotive industry by ensuring a steady market for small EVs, facilitating domestic battery production. Second, it aids Europe in reaching its climate targets by increasing EV adoption. Third, it provides affordable mobility, complementing public transport in areas where cars are essential.
This initiative could also positively impact the second-hand market. Currently, used EVs are costly, hindering broader adoption. By expanding access now, we can foster a vibrant, affordable second-hand market, making electric mobility more accessible to Europeans.
A European Promise
Relying on combustion engines offers false hope and risks stalling innovation. Conversely, a European Social Leasing Plan could drive the growth of future industries. Envision towns where electric cars are commonplace, leading to cleaner air and quieter streets, enhancing the European quality of life.
Greener cars made in European factories could signify Europe’s commitment to its citizens, climate goals, and industrial future. Social leasing promises to drive demand for affordable EVs, combat transport poverty, and ensure the next generation of cars is proudly European-made.
Original Story at euobserver.com