A senior Volkswagen executive said Wednesday that the EU’s deal to phase out combustion engine cars in just 12 years is challenging, but a more difficult hurdle will be making enough batteries to power electric cars.
The remarks come after EU countries struck deals early on Wednesday over proposed laws to tackle climate change, including requiring new cars sold in the EU to emit zero CO2 by 2035.
This would make it impossible to sell cars with internal-combustion engines.
The European Commission first proposed the package last summer, aimed at slashing planet-warming emissions this decade, but the overnight deal makes it likely that the proposal will become EU law.
“It’s a challenging goal. We think it’s possible,” VW chief financial officer Arno Entlitz told Reuters in an interview at the Reuters Automotive Europe conference on Wednesday.
“The most challenging topic is not getting the car plants ready. The most challenging topic will be strengthening the battery supply chain.”
VW has said it will stop selling combustion-engined cars in the region at Target, but some carmakers are lagging behind in the race for growth.
Electric vehicles like Toyota may struggle to meet the target. The Japanese carmaker declined to comment on Wednesday.
Major carmakers are rushing to secure battery cell supplies, but finding enough battery raw materials can be a major problem.
Failure to obtain adequate supplies of lithium, nickel, manganese or cobalt could slow the transition to electric vehicles (EVs), make those vehicles more expensive and jeopardize the carmaker’s profit margins.
Stelantis CEO Carlos Tavares said last month that he expects EV battery shortages to hit the auto industry in 2024-2025 as manufacturers try to ramp up electric vehicle sales while still building new battery factories .
The agreement in Luxembourg came after more than 16 hours of talks, in which Italy, Slovakia and other states wanted the phase-out to be delayed until 2040.
The countries eventually backed a deal that kept the 2035 target and asked Brussels to assess in 2026 whether hybrid vehicles could comply with the target.
The 2035 proposal is designed so that, in theory, any type of car technology such as hybrids or cars running on sustainable fuels can comply, as long as it means the car has no carbon dioxide emissions.
The Commission’s 2026 review will assess what technological advances have been made in hybrid cars to see if they can comply with the 2035 target.