Clarity Not Populism In Transition To Electric Cars

From left to right Bérengère Beffort, Dominique Laurent, Lucie Martin, Antonio Ferramancho, Gerry Wagner (Photo © CoC)

Last week, the Luxembourg Chamber of Commerce hosted an event aimed at understanding how to decarbonise the mobility industry and meet the stringent 2035 EU regulations which will ban the use of fossil fuel-powered cars. A paradigm shift for the sector which employs tens of thousands will be necessary.

This was the key message of a conference held at the Luxembourg Chamber of Commerce on Wednesday 20 March 2024 where political, economic and industry experts took part in a panel discussion on the challenges ahead. It was also the occasion where the Chambre of Commerce presented its publication entitled, “Electric cars in Luxembourg: Mastering the transition in the face of challenges.”

The publication opens, “On a global level, transportation is responsible for 16.2% of greenhouse emissions, 12% of which comes from road transport directly… In 2022 this figure reached 60.3% in Luxembourg due to the amount of fuel sold to through-traffic and non-residents.” It then goes on to present sixteen recommendations for government and only two for industry. 

It is clear that the publication’s authors believe that it is the role of government to lead the way in the transition to electric vehicles. This sentiment was echoed in the panel discussion where participants called for clarity from lawmakers, especially on the issue of VAT. They also believed the transition is happening too quickly. 

EVs too expensive?

Nicolas Meilhan, future fuel and mobility specialist said, “Petrol is behind us and today’s electric cars are suited to daily life, but we need to be patient.” His view is that carpooling and smaller cars are the way forward.

Lucie Martin, economist at the Luxembourg Chamber of Commerce said, “Companies are investing heavily in electric mobility. Step-by-step the cost of production will come down making electric cars more affordable.”

While the move to a decarbonised mobility industry is no doubt underway, Dominque Laurent, managing partner of PwC Luxembourg said that EVs were “still too expensive”. On a positive note, he noted that: “Cars are becoming less valuable as part of a salary package. For young people, mobility is more important.”

Too much focus on cars

Representing the House of Automobile, Gerry Weber warned that, the government must not take a populist approach to lawmaking. 

“There is too much focus on cars. CO2 emissions from private cars in Luxembourg are low. The government needs to look at the mix.”

In the third quarter of 2023, electric cars represented 24.68% of car sales in Luxembourg. Including plug-in hybrid sales this figure exceeds 35%, primarily driven by business.

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