- In July of 2021,
the European Union announced a proposal
that would ban the sale of new gas powered vehicles
on the continent by 2035.
The full EU proposal was this,
cut CO2 emissions from cars 55% versus 2021 levels by 2030,
then a hundred percent by 2035.
Let me do a little bit of math here, okay.
Take 100% of gas cars that are sold now, subtract 55%.
Okay, that's 45% left, then subtract 100% of that.
Okay, the math checks out. That's 0% of cars left.
If approved, the new law would make it
damn near impossible for auto manufacturers
to sell gas or diesel cars in 27 countries.
While European environmentalists
and politicians largely cheered this news,
blow back from some automakers was swift.
And it was Italian supercar manufacturers
in particular, who said (beep).
On this episode of WheelHouse,
what is Euro's ban on gas powered cars
mean for companies like Ferrari and Lamborghini,
for the supercar in general?
And how far might the Italian government go to stop it?
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These proposed regulations are part
of an ambitious new effort by the European Union
to address climate change
called the 2030 Climate Target Plan.
Developed by the European Commission,
which is the EU government's executive branch,
its goal is to reduce Europe's overall carbon footprint
by 55% compared to 1990 levels.
Other aspects of the plan include,
planting 3 billion trees across Europe
and increasing renewable energy production
by 40% over the next nine years.
This is stuff that frankly needs to get done.
Also included are several proposals
to increase the practicality and sales of electric vehicles.
One law would require European countries
to install public charging stations
no more than 60 kilometers apart on major roads by 2025.
The plan also estimates up to 120 billion euros
will need to be spent on chargers across the EU by 2040.
But the combustion engine ban
is arguably the most impactful part
or at least the most visible.
In addition to the huge ramifications
for enthusiasts and collectors,
car companies provide direct or indirect jobs
to 13.8 million Europeans.
That's more Europeans than have ever bought
Europe's best-selling album ever.
Celine Dion's 10 times platinum, "Let's Talk About Love."
So it's actually a little surprising
that several automakers responded
to the band by saying, man whatever.
My heart will go on.
Yes, the overall response was a mix
of positive and negative.
The ban would actually be no big deal for Volkswagen,
which had already announced
to stop selling gas cars in Europe by 2035.
Similarly Stellantis, the newish multinational corporation
that owns Dodge and Jeep among others,
also previously announced a 30 billion Euro investment
in electrifying their offerings.
And Ford's European division, has said that
it will feature an all electric lineup by 2030.
So see, not a huge deal for them.
However, the European Automobile Manufacturers Association
went to bat for combustion engines.
The Industry Trade Organization,
announced their opposition to the ban
by saying that outlying any specific technology
"is not a rational way forward."
and that the climate plan should include gas,
electric, hybrid and hydrogen powered vehicles
all playing a role.
This resistance foreshadowed,
the Italian government's eventual response.
More than anything else, the Italian motor industry
is defined by rich tradition of sports cars.
Ferrari Lamborghini, Maserati, Alfa Romeo, and Pagani
all make a lot of cars with big engines that go.
(car engine roaring) (seagull squealing)
So unlike their counterparts in Germany,
where the auto industry is dominated by the wide variety
of brands under Volkswagen's huge corporate umbrella,
Italy's car industry is unusually reliant on spirited,
but inefficient gas guzzlers.
Unfortunately, the proposed timeline
for the gas engine sundown is extra difficult
to meet this kind of luxury car maker.
There's almost no way around it.
Powerful gas engines mean above average pollution.
Plus, because these kinds of cars
are generally produced in such low volumes
it makes much less financial sense
for these companies to recalibrate
their entire production facilities and assembly processes.
Ferrari is probably the most prominent of these brands
due to its esteem history and the fact that
it's the only major Italian car manufacturer
not currently owned by global conglomerate.
Ferrari has also been particularly slow
to embrace electrification.
The company recently announced plans
for an all electric vehicle by 2025,
which surprised observers
since it actually moved up their previous timeline.
By contrast, the fully electric Porsche Taycan
was announced in 2015 and has been on road since 2019.
More than 20,000 of them were delivered
to consumers last year.
And this year it outsold the 911 and the Tesla Model X.
Meanwhile Lamborghini's Chief Technology Officer,
Maurizio Reggiani recently told The Drive, and I quote,
"For us, it's fundamental to continue to use a V12 engine."
The company has committed to cutting it's CO2 emissions
by half by 2025, but appears primarily focused
on developing plug-in hybrids,
which would also be illegal if the EU proposal is adopted.
Interesting.
With all that in mind, it makes sense
that Italy's government would be worried
about the future financial health of sports car companies,
particularly those that are embedded
into the fabric of Italian culture.
Still the same could probably be said
for a lot of industries, right?
I can't imagine that this climate plan
is very tied to the smokestack industry, for example.
But I haven't heard about any governments
lobbying the EU on behalf of chimney sweeps.
Yet that's exactly what Italy did for their car companies.
This is where a guy named Roberto Cingolani comes in.
In February of 2021, Cingolani was appointed
to be the minister of ecological transition
by Italy's new prime minister.
This newly created cabinet position
is in charge of Italian energy and environmental matters.
And in September, Cingolani made headlines
when he announced that Italy was in talks
with the European Union to shield supercar makers,
Ferrari and Lamborghini in particular,
from the gas engine phase-out.
Cingolani's argument is that Ferrari and Lamborghini
combined to sell around 16,500 vehicles in 2020,
a small fraction of the millions of cars sold every year.
Just the tiny fraction. Just the tiniest of pie slices.
That makes our collective CO2 output
much smaller than other kinds of vehicles,
as well as a fraction of what other big polluters
like the meat industry produce.
(cow mooing)
This is all true, but there's another variable
which was conveniently left out of Italy's announcement.
Roberto Cingolani, Italy's head environmental honcho
used to work for, drum roll please.
(drums rolling) You know what?
That's not big enough. Add some tempo in there, SR.
Maybe some wind chimes. Great.
Epic, but whimsical.
Roberto Cingolani used to work for Ferrari.
He was on their board of directors.
If you think that sounds
like a conflict of interest, I'm with you.
But then again, my interests conflict all the time,
like I like pop tarts and toaster strudels.
So what do I know?
Cingolani actually had to resign on Ferrari's board
in order to take the job
as Minister of Ecological Transition.
Prior to his stint at Ferrari,
he was Chief Technology Officer
for an Italian weapons manufacturer called Leonardo.
He sounds like a real tree hugger to me.
Perhaps unsurprisingly Cingoloni,
almost immediately found himself
in conflict with Italian climate activists
who have been concerned with his cause
to slow the clean energy transition,
particularly his support of natural gas.
Probably didn't help when he gave a speech saying
and I quote, "Extremist ideological environmentalist,"
dot, dot, dot, "are worse for the climate catastrophe."
To be fair Cingolani, also reiterated
Italy's commitment to reducing emissions,
even as it called for the supercar exception.
It's also unclear if Italy's request
was an independent government decision
or result of lobbying by the companies.
I wonder which?
Either way it's clear that Cingolani
sees climate change as a problem
that can be solved while also maintaining
the Italian tradition of thick booty engine blocks.
Like the reaction to the ban proposal itself,
response to Italy's proposition was mixed.
Supercar enthusiasts were grateful to get a lifeline
though some have wondered
about the specific inclusion of Ferrari and Lambo
without any mention of Maserati
or any other similar companies.
The French and German governments have also made noise
about keeping the full ban, but pushing back the timeline.
But Porsche CEO, Oliver Bloom,
has publicly campaigned against the Italian exception
saying that every automaker must contribute
to the fight against climate change.
It probably doesn't hurt that he's so far
ahead of the competition on electrification.
And remember, Porsche also recently gained access
to Rimac EV tag from the Bugatti deal,
I talked about a few episodes ago.
Ironically Lamborghini could also access
that tag since they're part
of the same corporate hierarchy as Porsche.
They just don't want to, for some reason.
So what's next?
Both the gas engine ban and the supercar
carve-out are just proposals for now.
And it could be up to two years
until it's actually voted on.
Even if the band passes,
there'd still be more than a decade
until the sundown actually arrives.
So, there's no need to plan
for a funeral of the event to go yet.
It is worth noting that this kind
of haggling over details and exceptions
is fairly typical for the EU legislative process.
At the same time, it's also worth noting
that the future of the human race
isn't generally hanging in the balance.
And that brings us to the moral question lurking
underneath all the shiny cars and political machinations.
Does being rich, gives someone more right to pollute?
Because that's essentially what Italy is proposing here.
Under Roberto Cingolani's plan,
people who can afford to drop 200K on a Lamborghini,
will get to operate
under different rules than everyone else.
As much as we all love the roar of a 12 cylinder engine,
is that really fair?
Italy's proposal also might have ramifications
for other aspects of the auto industry.
If there's an exception written for luxury cars,
then it might increase the chances
that motor sport organizations request something similar
and down the road guidelines for classic cars
could eventually be up for discussion as well.
And it's a whole can of SpaghettiOs.
Unfortunately there's no easy solution.
And like it or not, the auto industry
will have to answer some big existential questions
over the next decade or so.
But luckily I know the perfect guy to do it.
A rich dude who used to build missiles. Good luck, Roberto.
(calm piano music)
(water blooping)
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