The President of the auto lobby ACEA Ola Källenius, who's also the CEO of Mercedes-Benz Group, welcomed the recent deal to cap the imports of Chinese hybrid vehicles to the EU. He called for a level-playing field and the EU to increase its competitiveness. He spoke with Bloomberg's Oliver Crook in Brussels.
Well, Ola Källenius, CEO of Mercedes-Benz and of course also president of ACEA, thank you so much for speaking us to here in Brussels.
As you've mentioned just in this press conference, you've been discussing this is a sort of critical moment for a number of regulatory message for uh uh regulatory issues for the car industry. I'd like to get your perspective on one of them. One of them is trade. Just your rea- reaction so far to what we've seen to the reaction to these hybrid vehicles, the deal that was struck by the European Union. Do you think that that is sort of a sustainable path forward on how to deal with Chinese imports here in Europe?
So today I'm here in Brussels uh representing the European uh automakers association and and speaking for them. And our reaction to this agreement last Friday between the EU and China, we think it's a pragmatic agreement to create some level playing field here and and maybe have a little bit of a a a pause uh in the uh uh market development. Uh so we welcome this agreement. Uh uh but ultimately, it's up to the EU to improve its competitiveness. Uh what I think will happen over time is that OEMs from other countries that want to do business in Europe, they will localize their activities here as well, as we have done in markets around the world for a long, long time, including China.
And for as long as I've heard you speak, you've been a sort of big defender of free markets and sort of liberal economics in terms of getting that free trade. Now it seems that even Germany that has historically been a very strong advocate for that seems to be shifting. I'd like to get your view of how you see EU policy on trade shifting more broadly towards China. And if you say this is a good pragmatic sort of short-term solution, what does a sustainable one look like?
The most sustainable one is to improve competitiveness of Europe. That's why we're calling upon uh policymakers to create an environment where the competitiveness of Europe is improved. That's what we do every day in our businesses. And of course, global companies uh uh live off of globalization and free trade, there's no question. But the realities of what we're seeing in the world on trade policy is uh it's not always a level playing field. So from time to time, policymakers need to step in and level up the playing field and I think that's what that agreement last Friday is all about.
And thinking also about some of the other regulatory measures, we've been talking about the CO2 regulations here uh in Europe. We uh heard from Renault yesterday saying that effectively if they go forward as they are intended now, they would have to curb capacity by 300,000 vehicles. I think that's helpful in sort of demonstrating numerically what the effect is going to be. Can you give an estimate for more broadly on the industry what the effect would be?
The European auto industry in terms of uh transition uh and transformation towards zero emission mobility, smart vehicles, AI, software-defined vehicles is tremendously success- successful. Uh, uh we are on a very fast trajectory of increasing sales of battery electric vehicles in Europe, uh software-defined vehicles, uh autonomous drive. But for a transformation to be successful, we believe strongly you need to use a market-based approach. You cannot take the consumer out of the equation here and hope that uh the state telling the consumer what to do and only use uh uh penalties for manufacturer as the tool to achieve that. We believe it's the wrong method. So, right goal, wrong method. And that's why we're asking for in the revision of the CO2 policies of the EU, use more of a market-based approach. Uh introduce technological flexibilities. All technologies can contribute to decarbonization and incentivize the move into uh the new products. We think that will be more successful.
And thinking about the uh Industrial Accelerator Act as well, a big debate that's uh raging about kind of the Made in Europe provisions there. How do you see that uh that uh a debate evolving at this stage? And where would you like to see it go?
So, ACEA represents the European manufacturers. So do we want to have a very strong industrial base in Europe? Absolutely, yes. Most of the companies part of our association are of course companies that were founded here in Europe uh and uh in in the case of my own company, we're the original inventors of the automobile. Uh, we have built up an ecosystem in Europe over more than 100 years, which is second to none. Uh, to create incentives to strengthen that and make sure that Europe uh remains a strong industrial base for the EU, we support it, but also handle with care. We cannot in the fine print of so- such regulations uh um end up with supply chain distortions uh or other market imperfections that don't make the policy effective. So, the general purpose we have said, okay, let's support um industrialization in Europe, capital allocation to Europe. It's a good thing. But um, watch out in the fine print that the policies are realistic, that the timelines are realistic and that we don't end up with unintended consequences.
And a final question on China because EU leaders will be descending about, you know, next door to right here for the next two days to discuss trade measures going forward. Do you think that Europe is at risk of getting too protectionistic in quite on the question of China? Do you think though potentially they're responding accurately to, as you were mentioning, some of the imbalances in the sort of trading system? And do you sort of fear for retaliation? What do you think that could look like?
Uh, both EU and China over the last decades and I believe in the decades uh to come uh will benefit from cooperation. It needs to be fair cooperation, it needs to be a level playing field. Uh we will invest more in China, they will invest more here. So, cooperation needs to think to be I think the the spirit uh of negotiations that are ongoing. Uh, but in the uh political realities that we live in, uh I'm sure there will also be uh policymaking that takes in the level playing field into account.
And I've got to ask you one question about one of the fan favorites and that is the Baby G. When we last spoke about it a few years ago, 2023, the world's been sort of in anticipation on that. Can you give us an update on the potential delivery date of the Baby G?
It seems like everybody loves the G-Class. It's an iconic car and when we made that announcement, we're going to make a smaller brother to the G, it was like my my phone was on fire uh with messages. And I can say this, it's coming and it's coming sooner than you think.
And when is that going to be? Can you give us a quarter or a half?
Less than 24 months from now.
Copy that. Thank you very much, Ola Källenius.
