In January 1886, a German man with a distinctive mustache entered the Berlin patent office. He brought with him an innovative idea that he managed to implement with his wife. Bertha. The man’s name, a career engineer, was: Karl Benz and the first vehicle with an internal combustion engine, an invention that would completely change the world. Today, almost a century and a half later, the automotive industry is facing its next big revolution. Paradoxically, the goal is to leave that great invention behind. benz and enter a new era, the electric age, in pursuit of zero pollutant emissions. However, this interest does not seem to materialize as planned in the new period. However, many companies in the industry had to take action to prevent an early shipwreck.
Among these, a historical passage It is perhaps the best example of the uncertainty paradigm that the electric car produces today. The global leadership of the multinational company, which has had a presence in Spain for more than 40 years thanks to the Almussafes facility in Valencia, announced to the majority union UGT in mid-November that they would “postpone” the investment without a promised date. 2022 to electrify the factory. And although company sources in Spain officially limit themselves to saying that “nothing has been said about the delay”, they admit that “the market situation is being studied” and that they will “adapt to the rhythm determined by the market”. customer”. And that’s it adaption and the lack of news at a time when the electric car was not on the road caused concern among factory workers.
unpredictable context
“We are moving forward in an unexpected scenario,” he says. Carlos Faubel, leader of the UGT at the plant and chairman of the works committee, underlines that there is “uncertainty and anxiety about how electrification will continue in Valencia and Europe” as there is “no clear situation”. It is a shared vision Daniel PortilloSTM-Intersindical’s spokesperson at the facilities points out that the “impotence” prevailing among Almussafes staff after the labor “sacrifices” made by the staff is “not enough” for the multinational company to clarify whether they will take any steps in this regard. that product. “We still can’t see the light at the end of the tunnel,” he says.
This sentiment is understandable, as the factory has experienced three years of trouble in the past four years (the most recent of which saw 1,100 layoffs in April), leaving its workforce at a historic low. However, the production of three vehicles: Mondeo, S-Max and Galaxy was stopped. The Transit minibus will also say goodbye in 2024, leaving in its future only the Kuga, a hybrid whose current sales are not enough to guarantee the necessary workload until the arrival of electric models. with the desire Portilloas are Francisco SeguraThe head of the cluster covering the sub-industry of the Valencian automotive industry (Avia) will believe that future Ford cars at Almussafes will be “bestsellers” and that this will guarantee sufficient work for both the factory and suppliers. “But today we don’t know anything, so we’re hoping he’ll make a statement,” he says. faubel.
Despite this context, both union leaders say there is no loss of confidence in the eventual future of electrical workers. Nor did he do so for the Industrial Regional Secretary of the Generalitat Valenciana. Felipe CarrascoHe sees no “doubt” in Ford’s case, instead thinking that the brand is “keeping up” with the evolution of its market and product.
In this sense, the American company requested assistance in the second edition of PERTE for the development of electric and connected vehicles, and within this framework, it has already obtained 37.6 million dollars for a battery facility in Almussafes. Of course, his resignation from the funds at the first stage due to not being able to meet the investment deadlines specified in the call is still in mind. And if it turns out that the decision taken at the meeting in Valencia is not an isolated decision, but one of many delays the firm has made around the world, fears of a new withdrawal are even greater.
Two main reasons
Without going any further, it recently reduced the production capacity of its first lithium ferrophosphate (LFT) battery manufacturing plant in Michigan (United States) and postponed or outright canceled other similar facilities it had planned in North America. and Turkey. Likewise, it reduced the planned production of two electric models for 2024, namely the Mustang Mach-e and the F-150 Lightning truck, and paralyzed for several months the launch of the electric Explorer, which was expected to be allocated to the Cologne plant. (Germany). ). The explanation behind all these movements is the same. The progress in electric models is not what the company expected.
The slow take-off was also noticed by the company’s CEO. Jim FarleyHe listed two main reasons for this in September. On the one hand, there is an inadequate charging infrastructure for the consumer to go shopping. On the other hand, it is a price high enough that the middle class, which is the majority in many countries of the Old Continent, can afford it. Both are pillars of the “perfect storm,” as one spokesperson put it. From the Spanish dealer association Faconauto.
First, the charging infrastructure indicator prepared by Anfac, the Spanish vehicle manufacturers association, with data obtained from various European sources, clearly reveals that there is an electric progress on the continent, albeit slowly and at different speeds. While the Netherlands and Norway have managed to establish sufficient networks for such vehicles, others, such as Spain, are at the bottom of the list. arrangementIt is a far cry from the Twenty-Seven average, which currently does not meet needs in terms of facilities such as electric charging stations.
“Europe demands that we have charging stations for passenger cars at least every 60 kilometers by the end of 2025,” recalls Faconuato. These are “tasks” that are believed to be “not done” in countries like Spain. However, Felix GarciaThe biggest problem with this lack of infrastructure that exists today in regions like Spain is the lack of agility to install them in homes and public spaces, Anfac’s communications director said. “Direct assistance is needed to establish points where the car can be left and charged,” he notes on this issue, but before underlining: “Manufacturers want to sell the maximum number of vehicles and electricity companies want to install charging points, but for this we need to see business”.
For all this, it is very important to improve at this point. But it is equally or more important that the customer can pay for it. García acknowledges that “the price of the electric car is more expensive compared to its combustion counterpart,” but he also thinks that in Spain, for example, where only 5% of units sold are electric, “people don’t own any electric cars.” There was a perception that there was up to 10 thousand euros in aid for this purchase” because “sometimes it takes a year and a half to collect it.
But the slow start goes beyond the limits. If you look at the continent, pure electric car sales until November represented just 14% of the total; This is still very low compared to plug-in hybrids (25.7%) and gasoline cars (35.7%). For Faconauto, this situation is directly linked to high prices. “They do not operate in European markets where per capita income is lower,” he emphasizes, but he believes that gradually “as technology improves and prices come down” there will be more entry into these markets.
Main qualification
But while we wait for the future, until now this high price has always had to do with the high cost of basic elements such as batteries, which require the production of scarce materials such as lithium. And although the number of cells decreased by 14% last year, as BloombergNEF predicted, minimizing a downward trend that is expected to continue, the situation remains the same. It gave rise to another reality. This is the progress China has made compared to Western brands. “It has important metals for battery production and a clear cost advantage,” he emphasizes in this line. Vicente PallardoProfessor of Applied Economics at the University of Valencia (UV).
In his analysis, pallardo He states that Europe and its companies “reacted too late” on the road to electric cars, and when they did, there was “no clear commitment” to the change of era as the Asian giant’s. Moreover, he thinks that the leaders of the Old Continent made a mistake “because you will lose the race by providing financing for the purchase of vehicles, not for production.” “These decisions leave you with a distinct sense of inferiority to China, which has better and cheaper cars today,” he thinks.
According to Faconauto, this context reflects the addition of a “competitive factor” that is “needed.” But for pallardoUnder these conditions, it is “complicated” that in the future many Western companies will be able to compete with the Asian country in selling cars to Europe’s middle and lower classes, thereby losing the majority of the market.
Other options
Brands that do not have this space believe they will choose to “leave” the continent, forming alliances with China or other companies – Renault and Volkswagen, for example, will be exploring an alliance to promote a cheaper model, according to German media. They will look for business to “gain mileage” or in high-end vehicles aimed at a wealthier customer (a range where they will have to fight another giant like Tesla and which is considered the most likely future of Ford Almussafes). But all these options mean that the workload in Spanish and European factories is more or less reduced, and with it the workforce.
For GarcíaHowever, the race with Beijing is not lost yet. Emphasizing that “more affordable products will come” from brands such as Renault, Citröen and Volkswagen, Anfac president emphasizes, “We must refute the myth that Chinese automobiles are putting European automobiles at risk today.”
However, he is clear that the EU must “make a clear commitment on the automobile issue” in order for this threat to not become reality. “We can greatly reduce the carbon footprint, relocate and manufacture the components connected to the electric car because we have the capacity to compete on a level playing field.” To add. However, for this to happen, “Europe needs to maintain its industrial weight.”