Ineos CEO in interview: EU's unclear emissions plan threatens electric car future

Let's focus on Europe and the issue of regulations. Today, the key phrase not only for the automotive industry is "CO2 emissions."

Lynn Calder, CEO Ineos Automotive: Yes, it is definitely a huge challenge for the entire industry. As a new brand, it is somewhat easier for us because we don't have the "baggage" of 100 years of history, but we entered the market when changes were already taking place. But even as a small manufacturer, we have to make decisions on how to balance regulations with customers’ preferences.

Introducing a new car to the market requires an investment that must be financially viable. Meanwhile, there is still no clarity on where market development is heading. Governments in the United Kingdom and the European Union have a goal of reducing emissions, but no concrete plan on how to achieve it. And that is the biggest challenge and disappointment for us.

Of course, I will do what is necessary to adapt the company to regulations and achieve net zero emissions. However, I need a clearly defined plan outlining what is feasible and what isn’t. Just because governments want us to be 100 per cent electric by 2035 doesn’t mean it will happen, especially when we see that many drivers simply do not want electric cars.

2035 is the year when the so-called ban on the sale of combustion engine cars is supposed to come into effect. Some brands have announced they will be 100 per cent electric much earlier, by 2030. Now, some of them are slightly "softening" their stance, even taking a step back. From your words, I understand that Ineos does not intend to be at the forefront of the race to zero emissions.

No, we do not intend to. And we never said we would. We entered the market with petrol and diesel cars. In our opinion, there will always be a market for the Grenadier with a combustion engine. Even if there is a ban in the European Union, we will still be operating in at least 50 countries worldwide, and each has different requirements.

Not all drivers want to drive electric cars. They are more expensive, they do not hold their residual value, and there is no well-developed charging infrastructure, making consumers wary of range issues. Of course, a segment of the market is already buying electric cars today and is satisfied with them. But there is also a segment that does not buy them because they don’t want to—what will we offer them?

Indeed, we see some brands retreating from their original declarations. The EU announced regulations, and manufacturers worked hard to comply. Both sides seem to have forgotten about the drivers and their daily needs. People need to have a choice. That’s why we announced our next model as electric but with a so-called range extender—a small engine that will recharge the batteries, eliminating range anxiety. Such a car drives like one with a conventional engine but with drastically lower emissions.

If governments ban even such solutions, I don't know what we will do. I believe politicians should allow for transitional technologies. It will be better for the environment than trying to switch to 100 per cent electric and failing, which I believe we will.

What do you think is the solution for 2035 in the European Union?

A mix of drive systems. We need to leverage the potential of hybrids, plug-in hybrids, and range extenders to reduce CO2 emissions in various ways. I am convinced it is a more reasonable solution than striving solely for electric cars, as it will undoubtedly fail. Encouraging consumers to buy electric cars without investments in infrastructure will not work. People will keep conventional vehicles longer and buy much older used ones, resulting in a setback.

If Ursula von der Leyen were talking to you instead of me, what would you tell her?

Please clearly define what the plan is and do not ban transitional technologies. Also, invest in infrastructure.

There are voices that various incentives and subsidies are not enough to get drivers to switch to electric cars. Do you think it’s time for the stick instead of the carrot?

I don't believe in the effectiveness of incentives, but I understand them. The government expects consumers to stop driving combustion cars and switch to electric ones, which are more expensive to buy and potentially more expensive to operate, depending on the source of the electric energy. In such a situation, the government has to offer something in return. It cannot simply introduce regulations and expect consumers and manufacturers just to comply.

On the other hand, if something is economically viable only with short-term incentives, it won't work in the long run. Within the European Union alone, there are different ideas and views on the same issue. Consider the tax on owning a combustion engine car. I can imagine that if it successfully discourages ownership, then when all drivers have switched to electric cars, governments will tax them too to compensate for the lost revenue.

Ineos produces off-road vehicles at a time when SUVs are under scrutiny. For instance, in France, where a referendum supported higher parking fees for large cars. Will Europe turn away from SUVs?

We already see some signs, indeed. However, most cars today are getting bigger in size and weight due to batteries or shared platforms used by auto companies. Even "small cars" today are quite large.

France is a special case because it also imposes significant taxes on SUVs with combustion engines. This market is trying to be limited, but as I said, the world is vast, and there are many other countries where this type of car will be needed for many decades to come.