CarPay-Diem’s Opinion Piece on current events in the mobility industry

The European Union's ambitious proposal to phase out the sale of new cars with internal combustion engines (ICEs) by 2035 was meant to be a bold step towards a greener future. However, looking ahead and with a few years in practice, this shift raises significant concerns about its feasibility, social implications, economic consequences… and the readiness (or willingness) of European citizens to absorb the shock and its consequences.

While the environmental benefits of transitioning to electric vehicles (EVs) are clear—assuming the electricity is sourced from renewable energy, which is increasingly questionable given the rising demand for Small Modular Reactors (SMR)—the practical challenges of such a rapid shift are significant. The current EV infrastructure, particularly the availability of charging stations, is insufficient to support widespread adoption. Additionally, the high upfront cost of EVs, along with concerns about range, charging times, and convenience, may discourage many consumers from switching.

Even in an ideal scenario where supply perfectly meets demand, changing consumption habits and managing peak energy use pose challenges. For example, most people charge their EVs after work, often while using other appliances such as ovens, washing machines, or televisions—causing a surge in electricity demand during peak hours. This raises concerns about whether the grid can handle such concentrated consumption without a well-planned distribution strategy.

The economic implications of this transition are equally profound. The automotive industry, a cornerstone of many European economies (think Germany, France or Italy), faces a major restructuring. Job losses in the manufacturing and (in)directly depending industries are inevitable, potentially leading to social unrest. The transition to EVs will also require significant investments in research and development, as well as in the necessary infrastructure – which today is still far from the necessary pace to make it become a feasible reality with the ambitious deadlines – at least not without considering fallback plans for all impacted industries …citizens, workers and – eventually - consumers.

For consumers, the shift to EVs could result in increased costs. While the long-term operating costs of EVs may be lower, the initial purchase price remains a barrier for many. Furthermore, the potential for disparities in access to charging infrastructure could exacerbate existing inequalities. Let alone the growing gap between professional drivers (B2B) and personal car owners (B2C).

The impact on traditional fuel station operators is particularly severe. As the demand for fuel and diesel declines, these businesses face an uncertain future. While some may adapt by investing in EV charging infrastructure, others may be forced to close, leading to job losses and disruptions to essential services if they fail to adopt to this transformational challenges in time. Think energy, mobility and digital transformation at once with substantial consequences on business models and revenue streams that require both investments and adaptability.

In conclusion, while the European Union's goal of phasing out ICEs by 2035 is laudable from a strict ecological viewpoint, its realization is fraught with challenges that are often understated if not completely absent from the equation. A more gradual approach, coupled with significant investments in infrastructure and incentives for consumers, is essential to ensure a smooth transition. Failure to address these concerns could have far-reaching consequences for both the environment … and the economy.

While there is no single solution to these challenges, there are supportive measures that can help mitigate the impact and encourage a smoother transition, offering additional perks or incentives. For consumers, the growing integration of digital features and technologies into daily life will provide added comfort, insights, and help ease the shift toward a more sustainable lifestyle. For merchants and energy providers, the transition offers an opportunity to rethink business models, focusing not just on selling energy but on leveraging existing assets to offer more relevant services and convenience. By doing so, they can better serve clients while adapting to the inevitable decline in traditional energy consumption by investing into technologies that would fuel that realigned business model by attracting – and retaining – consumers with relevant offerings.