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What the EU’s decision to discontinue combustion engines means for automotive production

It’s almost a done deal: From 2035 onwards, vehicles with combustion engines will no longer be approved in the EU. The automotive construction industry is facing an unprecedented conversion of its production facilities. Discontinued plants on the used machine market have the potential to achieve high prices to fund part of the necessary investments.
  • Foto What the EU’s decision to discontinue combustion engines means for automotive production
German Emperor Wilhelm II allegedly once said, “The automobile is just a passing craze.” But he wasn’t wrong: The days of the car with the combustion engine as we know it are numbered. From 2035 onwards, conventionally powered vehicles will no longer be approved in the EU.

• Ambitious climate targets
The EU is adopting a pioneering role and aims to achieve climate neutrality by 2050. One-quarter of all CO2 emissions across Europe comes from traffic, with almost 800 million tonnes of CO2 being emitted on the EU’s roads in 2019. And with 62% of these emissions, passenger cars and motorcycles are the worst offenders.

As part of the green transformation, the EU therefore agreed in June to put an end to combustion engines in 2035. The EU environment ministers also agreed to the resolution. Now, EU states and the European Parliament will have to find a joint compromise. This could open up a back door for eFuels. However, full vehicle electrification is being targeted.

• Far-reaching consequences for production
For automotive production, this means that some vehicle components will have to be discontinued, modified or included for the very first time in supplier portfolios. The need for a combustion engine will be replaced by one for an electric machine. Fuel supply systems will be replaced by battery or fuel cell systems. The exhaust gas system and alternator will be done away with and the transmission will have to be adapted. High-performance electronics will also be needed, which until now have not been installed in conventional cars. And it’s not just the directly affected systems, but the entire vehicle architecture that is changing, as electrical engines do not need as much space.

• Financial challenges
The disrupted supply chain and coronavirus pandemic have brought losses to more than just the automotive construction sector. The planned change from combustion to electric drive represents a financial challenge. Based on the VDA’s estimates, more than 100 billion euro will need to be invested to convert automotive production by 2030. But how can this be funded?

• Making the change with used machines
One option for automotive operations is to capitalise on the equipment they no longer need on the used machine market, which benefits from the tense situation in machine and plant construction, currently also impacted by the current supply problems, rising costs and shortage of specialists. Production systems can be purchased on the used machine market more quickly and cheaply. It’s therefore a promising time for companies wanting to sell off their used plants.

Several automotive builders and suppliers have already began restructuring their production operations and feel well-equipped for the future. The international online auction house for used machines Surplex.comhas conducted more and more auctions of automotive construction technology following the conversion of prominent European production sites in the past few months. In particular, robotics technology plants – such as welding cells, industrial robots and compact plants – as well as metal machining systems have changed hands. Entire site closures, such as that of supplier Adient Automotive Romania have also been settled from a single source. Operations that want to adjust their production in light of the current changes can rely on a premium service with Surplex.https://www.surplex.com/en/

• About Surplex
Surplex is one of Europe's leading industrial auction houses and trades worldwide in used machines and factory equipment. The 16-language surplex.com auction platform is visited around 50 million times every year. We sell more than 55,000 industrial products per year in over 500 online auctions. The company is based in Düsseldorf and has offices in 15 European countries. Over 200 employees from 20 different nations generate an annual turnover of more than 100 million euros.
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