(Bloomberg) -- Electric vehicle subsidies must be reintroduced in countries that have scrapped them if Europe wants to meet its targets for phasing out combustion-engine cars, said U.K. automotive supplier Dowlais Group Plc.
Cooling demand for battery-powered cars is threatening plans to end the sale of new vehicles with a combustion engine by 2030 in the U.K. and five years later in the European Union, Chief Executive Officer Liam Butterworth said Tuesday.
“If the regulations are going to stay as they are, then absolutely there will need to be some kind of subsidies to support” automakers, Butterworth said in an interview for Dowlais’ first-half results.
Carmakers and their suppliers are grappling with a slump in EV demand after countries including Germany and Sweden scrapped or lowered aid for the technology. Manufacturers including Mercedes-Benz Group AG and Volkswagen AG have since delayed or watered down their rollout plans.
Dowlais’ customers — which include Ford Motor Co. and General Motors Co. — have pushed back deliveries of electric powertrains, the CEO said, adding that the surprise removal of subsidies in Germany at the end of last year has hurt demand.
“There’s a lot of suppliers who have significantly over-invested” in EV technologies, Butterworth said, adding that there are “a lot of challenging discussions going on” with automakers about how that discrepancy will be handled.
As a result of the slowdown, the company said Tuesday it now expects adjusted revenue to fall by a mid- to high-single digit percentage this year. Separately, the supplier that was spun out of aerospace engineer Melrose Industries Plc has launched a strategic review of its powder metallurgy business that could result in a sale.
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